Correlation Between Ebro Foods and GREENLIGHT CAP
Can any of the company-specific risk be diversified away by investing in both Ebro Foods and GREENLIGHT CAP 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 GREENLIGHT CAP 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 GREENLIGHT CAP RE, you can compare the effects of market volatilities on Ebro Foods and GREENLIGHT CAP 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 GREENLIGHT CAP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ebro Foods and GREENLIGHT CAP.
Diversification Opportunities for Ebro Foods and GREENLIGHT CAP
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ebro and GREENLIGHT is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Ebro Foods SA and GREENLIGHT CAP RE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GREENLIGHT CAP RE 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 GREENLIGHT CAP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GREENLIGHT CAP RE has no effect on the direction of Ebro Foods i.e., Ebro Foods and GREENLIGHT CAP go up and down completely randomly.
Pair Corralation between Ebro Foods and GREENLIGHT CAP
Assuming the 90 days horizon Ebro Foods is expected to generate 37.51 times less return on investment than GREENLIGHT CAP. But when comparing it to its historical volatility, Ebro Foods SA is 2.18 times less risky than GREENLIGHT CAP. It trades about 0.0 of its potential returns per unit of risk. GREENLIGHT CAP RE is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,260 in GREENLIGHT CAP RE on October 12, 2024 and sell it today you would earn a total of 90.00 from holding GREENLIGHT CAP RE or generate 7.14% 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. GREENLIGHT CAP RE
Performance |
| Timeline |
| Ebro Foods SA |
| GREENLIGHT CAP RE |
Ebro Foods and GREENLIGHT CAP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ebro Foods and GREENLIGHT CAP
The main advantage of trading using opposite Ebro Foods and GREENLIGHT CAP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ebro Foods position performs unexpectedly, GREENLIGHT CAP 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 GREENLIGHT CAP will offset losses from the drop in GREENLIGHT CAP's long position.| Ebro Foods vs. AIR PRODCHEMICALS | Ebro Foods vs. Mitsui Chemicals | Ebro Foods vs. OURGAME INTHOLDL 00005 | Ebro Foods vs. Dalata Hotel Group |
| GREENLIGHT CAP vs. TITANIUM TRANSPORTGROUP | GREENLIGHT CAP vs. Liberty Broadband | GREENLIGHT CAP vs. UNITED RENTALS | GREENLIGHT CAP vs. Texas Roadhouse |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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