Correlation Between Ebro Foods and FEMALE HEALTH
Can any of the company-specific risk be diversified away by investing in both Ebro Foods and FEMALE HEALTH 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 FEMALE HEALTH 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 FEMALE HEALTH, you can compare the effects of market volatilities on Ebro Foods and FEMALE HEALTH 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 FEMALE HEALTH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ebro Foods and FEMALE HEALTH.
Diversification Opportunities for Ebro Foods and FEMALE HEALTH
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Ebro and FEMALE is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Ebro Foods SA and FEMALE HEALTH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FEMALE HEALTH 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 FEMALE HEALTH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FEMALE HEALTH has no effect on the direction of Ebro Foods i.e., Ebro Foods and FEMALE HEALTH go up and down completely randomly.
Pair Corralation between Ebro Foods and FEMALE HEALTH
Assuming the 90 days horizon Ebro Foods SA is expected to generate 0.16 times more return on investment than FEMALE HEALTH. However, Ebro Foods SA is 6.06 times less risky than FEMALE HEALTH. It trades about 0.03 of its potential returns per unit of risk. FEMALE HEALTH is currently generating about -0.04 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 Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ebro Foods SA vs. FEMALE HEALTH
Performance |
| Timeline |
| Ebro Foods SA |
| FEMALE HEALTH |
Ebro Foods and FEMALE HEALTH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ebro Foods and FEMALE HEALTH
The main advantage of trading using opposite Ebro Foods and FEMALE HEALTH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ebro Foods position performs unexpectedly, FEMALE HEALTH 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 FEMALE HEALTH will offset losses from the drop in FEMALE HEALTH'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 |
| FEMALE HEALTH vs. Universal Display | FEMALE HEALTH vs. SALESFORCE INC CDR | FEMALE HEALTH vs. Entravision Communications | FEMALE HEALTH vs. ULTRA CLEAN HLDGS |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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