Correlation Between Ebro Foods and AEON STORES
Can any of the company-specific risk be diversified away by investing in both Ebro Foods and AEON STORES 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 AEON STORES 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 AEON STORES, you can compare the effects of market volatilities on Ebro Foods and AEON STORES 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 AEON STORES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ebro Foods and AEON STORES.
Diversification Opportunities for Ebro Foods and AEON STORES
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ebro and AEON is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Ebro Foods SA and AEON STORES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AEON STORES 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 AEON STORES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AEON STORES has no effect on the direction of Ebro Foods i.e., Ebro Foods and AEON STORES go up and down completely randomly.
Pair Corralation between Ebro Foods and AEON STORES
Assuming the 90 days horizon Ebro Foods SA is expected to generate 0.33 times more return on investment than AEON STORES. However, Ebro Foods SA is 3.02 times less risky than AEON STORES. It trades about 0.03 of its potential returns per unit of risk. AEON STORES is currently generating about 0.0 per unit of risk. If you would invest 1,392 in Ebro Foods SA on September 3, 2024 and sell it today you would earn a total of 204.00 from holding Ebro Foods SA or generate 14.66% 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. AEON STORES
Performance |
| Timeline |
| Ebro Foods SA |
| AEON STORES |
Ebro Foods and AEON STORES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ebro Foods and AEON STORES
The main advantage of trading using opposite Ebro Foods and AEON STORES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ebro Foods position performs unexpectedly, AEON STORES 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 AEON STORES will offset losses from the drop in AEON STORES'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 |
| AEON STORES vs. TOTAL GABON | AEON STORES vs. Walgreens Boots Alliance | AEON STORES vs. Peak Resources Limited |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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