Correlation Between Ebro Foods and Voya Financial
Can any of the company-specific risk be diversified away by investing in both Ebro Foods and Voya Financial 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 Voya Financial 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 Voya Financial, you can compare the effects of market volatilities on Ebro Foods and Voya Financial 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 Voya Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ebro Foods and Voya Financial.
Diversification Opportunities for Ebro Foods and Voya Financial
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Ebro and Voya is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Ebro Foods SA and Voya Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Financial 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 Voya Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Financial has no effect on the direction of Ebro Foods i.e., Ebro Foods and Voya Financial go up and down completely randomly.
Pair Corralation between Ebro Foods and Voya Financial
Assuming the 90 days horizon Ebro Foods SA is expected to generate 0.58 times more return on investment than Voya Financial. However, Ebro Foods SA is 1.72 times less risky than Voya Financial. It trades about 0.03 of its potential returns per unit of risk. Voya Financial is currently generating about 0.01 per unit of risk. If you would invest 1,484 in Ebro Foods SA on September 20, 2024 and sell it today you would earn a total of 110.00 from holding Ebro Foods SA or generate 7.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Ebro Foods SA vs. Voya Financial
Performance |
| Timeline |
| Ebro Foods SA |
| Voya Financial |
Ebro Foods and Voya Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ebro Foods and Voya Financial
The main advantage of trading using opposite Ebro Foods and Voya Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ebro Foods position performs unexpectedly, Voya Financial 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 Voya Financial will offset losses from the drop in Voya Financial's long position.| Ebro Foods vs. Superior Plus Corp | Ebro Foods vs. SIVERS SEMICONDUCTORS AB | Ebro Foods vs. NorAm Drilling AS | Ebro Foods vs. Norsk Hydro ASA |
| Voya Financial vs. Ebro Foods SA | Voya Financial vs. TYSON FOODS A | Voya Financial vs. PARKEN Sport Entertainment | Voya Financial vs. Kaiser Aluminum |
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.
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