Correlation Between Ebro Foods and PATTIES FOODS
Can any of the company-specific risk be diversified away by investing in both Ebro Foods and PATTIES FOODS 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 PATTIES FOODS 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 PATTIES FOODS , you can compare the effects of market volatilities on Ebro Foods and PATTIES FOODS 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 PATTIES FOODS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ebro Foods and PATTIES FOODS.
Diversification Opportunities for Ebro Foods and PATTIES FOODS
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ebro and PATTIES is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Ebro Foods SA and PATTIES FOODS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PATTIES FOODS 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 PATTIES FOODS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PATTIES FOODS has no effect on the direction of Ebro Foods i.e., Ebro Foods and PATTIES FOODS go up and down completely randomly.
Pair Corralation between Ebro Foods and PATTIES FOODS
Assuming the 90 days horizon Ebro Foods SA is expected to generate 0.43 times more return on investment than PATTIES FOODS. However, Ebro Foods SA is 2.33 times less risky than PATTIES FOODS. It trades about 0.04 of its potential returns per unit of risk. PATTIES FOODS is currently generating about -0.05 per unit of risk. If you would invest 1,592 in Ebro Foods SA on November 7, 2024 and sell it today you would earn a total of 14.00 from holding Ebro Foods SA or generate 0.88% 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. PATTIES FOODS
Performance |
| Timeline |
| Ebro Foods SA |
| PATTIES FOODS |
Ebro Foods and PATTIES FOODS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ebro Foods and PATTIES FOODS
The main advantage of trading using opposite Ebro Foods and PATTIES FOODS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ebro Foods position performs unexpectedly, PATTIES FOODS 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 PATTIES FOODS will offset losses from the drop in PATTIES FOODS's long position.| Ebro Foods vs. SINGAPORE AIRLINES | Ebro Foods vs. Gol Intelligent Airlines | Ebro Foods vs. Tradegate AG Wertpapierhandelsbank | Ebro Foods vs. China Eastern Airlines |
| PATTIES FOODS vs. Perseus Mining Limited | PATTIES FOODS vs. STGEORGE MINING LTD | PATTIES FOODS vs. PennyMac Mortgage Investment | PATTIES FOODS vs. MCEWEN MINING INC |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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