Correlation Between Ebro Foods and DAX Index
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By analyzing existing cross correlation between Ebro Foods SA and DAX Index, you can compare the effects of market volatilities on Ebro Foods and DAX Index 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 DAX Index. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ebro Foods and DAX Index.
Diversification Opportunities for Ebro Foods and DAX Index
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ebro and DAX is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Ebro Foods SA and DAX Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DAX Index 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 DAX Index. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DAX Index has no effect on the direction of Ebro Foods i.e., Ebro Foods and DAX Index go up and down completely randomly.
Pair Corralation between Ebro Foods and DAX Index
Assuming the 90 days horizon Ebro Foods is expected to generate 2.92 times less return on investment than DAX Index. In addition to that, Ebro Foods is 1.22 times more volatile than DAX Index. It trades about 0.02 of its total potential returns per unit of risk. DAX Index is currently generating about 0.08 per unit of volatility. If you would invest 1,518,180 in DAX Index on October 9, 2024 and sell it today you would earn a total of 503,439 from holding DAX Index or generate 33.16% 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. DAX Index
Performance |
| Timeline |
Ebro Foods and DAX Index Volatility Contrast
Predicted Return Density |
| Returns |
Ebro Foods SA
Pair trading matchups for Ebro Foods
DAX Index
Pair trading matchups for DAX Index
Pair Trading with Ebro Foods and DAX Index
The main advantage of trading using opposite Ebro Foods and DAX Index positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ebro Foods position performs unexpectedly, DAX Index 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 DAX Index will offset losses from the drop in DAX Index's long position.| Ebro Foods vs. INTERSHOP Communications Aktiengesellschaft | Ebro Foods vs. Ares Management Corp | Ebro Foods vs. Cogent Communications Holdings | Ebro Foods vs. CEOTRONICS |
| DAX Index vs. Magnachip Semiconductor | DAX Index vs. Direct Line Insurance | DAX Index vs. CDN IMPERIAL BANK | DAX Index vs. Webster Financial |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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