Correlation Between Ebro Foods and Singapore Airlines
Can any of the company-specific risk be diversified away by investing in both Ebro Foods and Singapore Airlines 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 Singapore Airlines 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 Singapore Airlines Limited, you can compare the effects of market volatilities on Ebro Foods and Singapore Airlines 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 Singapore Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ebro Foods and Singapore Airlines.
Diversification Opportunities for Ebro Foods and Singapore Airlines
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ebro and Singapore is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Ebro Foods SA and Singapore Airlines Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Singapore Airlines 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 Singapore Airlines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Singapore Airlines has no effect on the direction of Ebro Foods i.e., Ebro Foods and Singapore Airlines go up and down completely randomly.
Pair Corralation between Ebro Foods and Singapore Airlines
Assuming the 90 days horizon Ebro Foods SA is expected to generate 0.81 times more return on investment than Singapore Airlines. However, Ebro Foods SA is 1.23 times less risky than Singapore Airlines. It trades about 0.0 of its potential returns per unit of risk. Singapore Airlines Limited is currently generating about -0.11 per unit of risk. If you would invest 1,578 in Ebro Foods SA on October 26, 2024 and sell it today you would earn a total of 0.00 from holding Ebro Foods SA or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
Ebro Foods SA vs. Singapore Airlines Limited
Performance |
| Timeline |
| Ebro Foods SA |
| Singapore Airlines |
Ebro Foods and Singapore Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ebro Foods and Singapore Airlines
The main advantage of trading using opposite Ebro Foods and Singapore Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ebro Foods position performs unexpectedly, Singapore Airlines 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 Singapore Airlines will offset losses from the drop in Singapore Airlines' long position.| Ebro Foods vs. Western Copper and | Ebro Foods vs. New Residential Investment | Ebro Foods vs. PennantPark Investment | Ebro Foods vs. Scottish Mortgage Investment |
| Singapore Airlines vs. Delta Air Lines | Singapore Airlines vs. Air China Limited | Singapore Airlines vs. AIR CHINA LTD | Singapore Airlines vs. RYANAIR HLDGS ADR |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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