Correlation Between EBRO FOODS and SANOK RUBBER
Can any of the company-specific risk be diversified away by investing in both EBRO FOODS and SANOK RUBBER 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 SANOK RUBBER into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EBRO FOODS and SANOK RUBBER ZY, you can compare the effects of market volatilities on EBRO FOODS and SANOK RUBBER 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 SANOK RUBBER. Check out your portfolio center. Please also check ongoing floating volatility patterns of EBRO FOODS and SANOK RUBBER.
Diversification Opportunities for EBRO FOODS and SANOK RUBBER
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between EBRO and SANOK is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding EBRO FOODS and SANOK RUBBER ZY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SANOK RUBBER ZY 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 are associated (or correlated) with SANOK RUBBER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SANOK RUBBER ZY has no effect on the direction of EBRO FOODS i.e., EBRO FOODS and SANOK RUBBER go up and down completely randomly.
Pair Corralation between EBRO FOODS and SANOK RUBBER
Assuming the 90 days trading horizon EBRO FOODS is expected to generate 3.09 times less return on investment than SANOK RUBBER. But when comparing it to its historical volatility, EBRO FOODS is 2.27 times less risky than SANOK RUBBER. It trades about 0.04 of its potential returns per unit of risk. SANOK RUBBER ZY is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 410.00 in SANOK RUBBER ZY on October 12, 2024 and sell it today you would earn a total of 103.00 from holding SANOK RUBBER ZY or generate 25.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
EBRO FOODS vs. SANOK RUBBER ZY
Performance |
| Timeline |
| EBRO FOODS |
| SANOK RUBBER ZY |
EBRO FOODS and SANOK RUBBER Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EBRO FOODS and SANOK RUBBER
The main advantage of trading using opposite EBRO FOODS and SANOK RUBBER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EBRO FOODS position performs unexpectedly, SANOK RUBBER 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 SANOK RUBBER will offset losses from the drop in SANOK RUBBER's long position.| EBRO FOODS vs. Astral Foods Limited | EBRO FOODS vs. COFCO Joycome Foods | EBRO FOODS vs. EIDESVIK OFFSHORE NK | EBRO FOODS vs. Tyson Foods |
| SANOK RUBBER vs. Jacquet Metal Service | SANOK RUBBER vs. Lendlease Group | SANOK RUBBER vs. Perseus Mining Limited | SANOK RUBBER vs. Gladstone Investment |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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