Correlation Between Ebro Foods and Strategic Education
Can any of the company-specific risk be diversified away by investing in both Ebro Foods and Strategic Education 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 Strategic Education 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 Strategic Education, you can compare the effects of market volatilities on Ebro Foods and Strategic Education 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 Strategic Education. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ebro Foods and Strategic Education.
Diversification Opportunities for Ebro Foods and Strategic Education
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ebro and Strategic is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Ebro Foods SA and Strategic Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strategic Education 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 Strategic Education. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strategic Education has no effect on the direction of Ebro Foods i.e., Ebro Foods and Strategic Education go up and down completely randomly.
Pair Corralation between Ebro Foods and Strategic Education
Assuming the 90 days horizon Ebro Foods SA is expected to generate 0.47 times more return on investment than Strategic Education. However, Ebro Foods SA is 2.11 times less risky than Strategic Education. It trades about -0.04 of its potential returns per unit of risk. Strategic Education is currently generating about -0.15 per unit of risk. If you would invest 1,584 in Ebro Foods SA on October 16, 2024 and sell it today you would lose (8.00) from holding Ebro Foods SA or give up 0.51% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ebro Foods SA vs. Strategic Education
Performance |
| Timeline |
| Ebro Foods SA |
| Strategic Education |
Ebro Foods and Strategic Education Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ebro Foods and Strategic Education
The main advantage of trading using opposite Ebro Foods and Strategic Education positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ebro Foods position performs unexpectedly, Strategic Education 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 Strategic Education will offset losses from the drop in Strategic Education's long position.| Ebro Foods vs. Playmates Toys Limited | Ebro Foods vs. PLAYWAY SA ZY 10 | Ebro Foods vs. PLAY2CHILL SA ZY | Ebro Foods vs. Gaming and Leisure |
| Strategic Education vs. Ebro Foods SA | Strategic Education vs. United Natural Foods | Strategic Education vs. CN MODERN DAIRY | Strategic Education vs. Tyson Foods |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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