Correlation Between Ebro Foods and BIALETTI INDUSTRIE
Can any of the company-specific risk be diversified away by investing in both Ebro Foods and BIALETTI INDUSTRIE at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Ebro Foods and BIALETTI INDUSTRIE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ebro Foods SA and BIALETTI INDUSTRIE, you can compare the effects of market volatilities on Ebro Foods and BIALETTI INDUSTRIE and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Ebro Foods with a short position of BIALETTI INDUSTRIE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ebro Foods and BIALETTI INDUSTRIE.
Diversification Opportunities for Ebro Foods and BIALETTI INDUSTRIE
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ebro and BIALETTI is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Ebro Foods SA and BIALETTI INDUSTRIE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BIALETTI INDUSTRIE and Ebro Foods is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Ebro Foods SA are associated (or correlated) with BIALETTI INDUSTRIE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BIALETTI INDUSTRIE has no effect on the direction of Ebro Foods i.e., Ebro Foods and BIALETTI INDUSTRIE go up and down completely randomly.
Pair Corralation between Ebro Foods and BIALETTI INDUSTRIE
Assuming the 90 days horizon Ebro Foods is expected to generate 15.45 times less return on investment than BIALETTI INDUSTRIE. But when comparing it to its historical volatility, Ebro Foods SA is 4.17 times less risky than BIALETTI INDUSTRIE. It trades about 0.05 of its potential returns per unit of risk. BIALETTI INDUSTRIE is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 21.00 in BIALETTI INDUSTRIE on November 7, 2024 and sell it today you would earn a total of 3.00 from holding BIALETTI INDUSTRIE or generate 14.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ebro Foods SA vs. BIALETTI INDUSTRIE
Performance |
| Timeline |
| Ebro Foods SA |
| BIALETTI INDUSTRIE |
Ebro Foods and BIALETTI INDUSTRIE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ebro Foods and BIALETTI INDUSTRIE
The main advantage of trading using opposite Ebro Foods and BIALETTI INDUSTRIE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ebro Foods position performs unexpectedly, BIALETTI INDUSTRIE can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in BIALETTI INDUSTRIE will offset losses from the drop in BIALETTI INDUSTRIE's long position.| Ebro Foods vs. 24SEVENOFFICE GROUP AB | Ebro Foods vs. Daito Trust Construction | Ebro Foods vs. TITAN MACHINERY | Ebro Foods vs. SCANSOURCE |
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Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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