Correlation Between Ebro Foods and Jacquet Metal
Can any of the company-specific risk be diversified away by investing in both Ebro Foods and Jacquet Metal 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 Jacquet Metal 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 Jacquet Metal Service, you can compare the effects of market volatilities on Ebro Foods and Jacquet Metal 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 Jacquet Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ebro Foods and Jacquet Metal.
Diversification Opportunities for Ebro Foods and Jacquet Metal
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ebro and Jacquet is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Ebro Foods SA and Jacquet Metal Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jacquet Metal Service 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 Jacquet Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jacquet Metal Service has no effect on the direction of Ebro Foods i.e., Ebro Foods and Jacquet Metal go up and down completely randomly.
Pair Corralation between Ebro Foods and Jacquet Metal
Assuming the 90 days horizon Ebro Foods is expected to generate 14.67 times less return on investment than Jacquet Metal. But when comparing it to its historical volatility, Ebro Foods SA is 1.89 times less risky than Jacquet Metal. It trades about 0.04 of its potential returns per unit of risk. Jacquet Metal Service is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 1,518 in Jacquet Metal Service on September 14, 2024 and sell it today you would earn a total of 126.00 from holding Jacquet Metal Service or generate 8.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ebro Foods SA vs. Jacquet Metal Service
Performance |
| Timeline |
| Ebro Foods SA |
| Jacquet Metal Service |
Ebro Foods and Jacquet Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ebro Foods and Jacquet Metal
The main advantage of trading using opposite Ebro Foods and Jacquet Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ebro Foods position performs unexpectedly, Jacquet Metal 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 Jacquet Metal will offset losses from the drop in Jacquet Metal's long position.| Ebro Foods vs. Hormel Foods | Ebro Foods vs. Superior Plus Corp | Ebro Foods vs. SIVERS SEMICONDUCTORS AB | Ebro Foods vs. NorAm Drilling AS |
| Jacquet Metal vs. ArcelorMittal | Jacquet Metal vs. NIPPON STEEL SPADR | Jacquet Metal vs. Reliance Steel Aluminum | Jacquet Metal vs. Superior Plus Corp |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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