Correlation Between Ebro Foods and PG E
Can any of the company-specific risk be diversified away by investing in both Ebro Foods and PG E 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 PG E 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 PG E P6, you can compare the effects of market volatilities on Ebro Foods and PG E 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 PG E. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ebro Foods and PG E.
Diversification Opportunities for Ebro Foods and PG E
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Ebro and PCG6 is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Ebro Foods SA and PG E P6 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PG E P6 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 PG E. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PG E P6 has no effect on the direction of Ebro Foods i.e., Ebro Foods and PG E go up and down completely randomly.
Pair Corralation between Ebro Foods and PG E
Assuming the 90 days horizon Ebro Foods is expected to generate 3.33 times less return on investment than PG E. But when comparing it to its historical volatility, Ebro Foods SA is 1.3 times less risky than PG E. It trades about 0.03 of its potential returns per unit of risk. PG E P6 is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 2,064 in PG E P6 on September 12, 2024 and sell it today you would earn a total of 136.00 from holding PG E P6 or generate 6.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ebro Foods SA vs. PG E P6
Performance |
| Timeline |
| Ebro Foods SA |
| PG E P6 |
Ebro Foods and PG E Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ebro Foods and PG E
The main advantage of trading using opposite Ebro Foods and PG E positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ebro Foods position performs unexpectedly, PG E 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 PG E will offset losses from the drop in PG E'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 |
| PG E vs. Ribbon Communications | PG E vs. Tower One Wireless | PG E vs. HANOVER INSURANCE | PG E vs. Safety Insurance Group |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Other Complementary Tools
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios |