Correlation Between Ebro Foods and Astral Foods
Can any of the company-specific risk be diversified away by investing in both Ebro Foods and Astral Foods 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 Astral Foods 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 Astral Foods Limited, you can compare the effects of market volatilities on Ebro Foods and Astral Foods 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 Astral Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ebro Foods and Astral Foods.
Diversification Opportunities for Ebro Foods and Astral Foods
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ebro and Astral is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Ebro Foods SA and Astral Foods Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Astral Foods Limited 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 Astral Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Astral Foods Limited has no effect on the direction of Ebro Foods i.e., Ebro Foods and Astral Foods go up and down completely randomly.
Pair Corralation between Ebro Foods and Astral Foods
Assuming the 90 days horizon Ebro Foods SA is expected to under-perform the Astral Foods. But the stock apears to be less risky and, when comparing its historical volatility, Ebro Foods SA is 1.87 times less risky than Astral Foods. The stock trades about -0.11 of its potential returns per unit of risk. The Astral Foods Limited is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 865.00 in Astral Foods Limited on August 27, 2024 and sell it today you would earn a total of 100.00 from holding Astral Foods Limited or generate 11.56% 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. Astral Foods Limited
Performance |
| Timeline |
| Ebro Foods SA |
| Astral Foods Limited |
Ebro Foods and Astral Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ebro Foods and Astral Foods
The main advantage of trading using opposite Ebro Foods and Astral Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ebro Foods position performs unexpectedly, Astral Foods 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 Astral Foods will offset losses from the drop in Astral Foods' long position.| Ebro Foods vs. Superior Plus Corp | Ebro Foods vs. NMI Holdings | Ebro Foods vs. Origin Agritech | Ebro Foods vs. SIVERS SEMICONDUCTORS AB |
| Astral Foods vs. Superior Plus Corp | Astral Foods vs. NMI Holdings | Astral Foods vs. Origin Agritech | Astral Foods vs. SIVERS SEMICONDUCTORS AB |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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