Correlation Between Ebro Foods and SHIP HEALTHCARE
Can any of the company-specific risk be diversified away by investing in both Ebro Foods and SHIP HEALTHCARE 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 SHIP HEALTHCARE 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 SHIP HEALTHCARE HLDGINC, you can compare the effects of market volatilities on Ebro Foods and SHIP HEALTHCARE 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 SHIP HEALTHCARE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ebro Foods and SHIP HEALTHCARE.
Diversification Opportunities for Ebro Foods and SHIP HEALTHCARE
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Ebro and SHIP is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Ebro Foods SA and SHIP HEALTHCARE HLDGINC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SHIP HEALTHCARE HLDGINC 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 SHIP HEALTHCARE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SHIP HEALTHCARE HLDGINC has no effect on the direction of Ebro Foods i.e., Ebro Foods and SHIP HEALTHCARE go up and down completely randomly.
Pair Corralation between Ebro Foods and SHIP HEALTHCARE
Assuming the 90 days horizon Ebro Foods is expected to generate 2.11 times less return on investment than SHIP HEALTHCARE. But when comparing it to its historical volatility, Ebro Foods SA is 2.86 times less risky than SHIP HEALTHCARE. It trades about 0.03 of its potential returns per unit of risk. SHIP HEALTHCARE HLDGINC is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,136 in SHIP HEALTHCARE HLDGINC on September 3, 2024 and sell it today you would earn a total of 214.00 from holding SHIP HEALTHCARE HLDGINC or generate 18.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ebro Foods SA vs. SHIP HEALTHCARE HLDGINC
Performance |
| Timeline |
| Ebro Foods SA |
| SHIP HEALTHCARE HLDGINC |
Ebro Foods and SHIP HEALTHCARE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ebro Foods and SHIP HEALTHCARE
The main advantage of trading using opposite Ebro Foods and SHIP HEALTHCARE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ebro Foods position performs unexpectedly, SHIP HEALTHCARE 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 SHIP HEALTHCARE will offset losses from the drop in SHIP HEALTHCARE's long position.| Ebro Foods vs. AEON STORES | Ebro Foods vs. JIAHUA STORES | Ebro Foods vs. NorAm Drilling AS | Ebro Foods vs. HK Electric Investments |
| SHIP HEALTHCARE vs. DEVRY EDUCATION GRP | SHIP HEALTHCARE vs. Titan Machinery | SHIP HEALTHCARE vs. CHINA EDUCATION GROUP | SHIP HEALTHCARE vs. United Utilities Group |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
Other Complementary Tools
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios |