Correlation Between EBRO FOODS and Global Ship
Can any of the company-specific risk be diversified away by investing in both EBRO FOODS and Global Ship 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 Global Ship into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EBRO FOODS and Global Ship Lease, you can compare the effects of market volatilities on EBRO FOODS and Global Ship 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 Global Ship. Check out your portfolio center. Please also check ongoing floating volatility patterns of EBRO FOODS and Global Ship.
Diversification Opportunities for EBRO FOODS and Global Ship
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between EBRO and Global is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding EBRO FOODS and Global Ship Lease in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Ship Lease 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 Global Ship. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Ship Lease has no effect on the direction of EBRO FOODS i.e., EBRO FOODS and Global Ship go up and down completely randomly.
Pair Corralation between EBRO FOODS and Global Ship
Assuming the 90 days trading horizon EBRO FOODS is expected to generate 0.47 times more return on investment than Global Ship. However, EBRO FOODS is 2.13 times less risky than Global Ship. It trades about 0.02 of its potential returns per unit of risk. Global Ship Lease is currently generating about -0.02 per unit of risk. If you would invest 1,572 in EBRO FOODS on October 30, 2024 and sell it today you would earn a total of 8.00 from holding EBRO FOODS or generate 0.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
EBRO FOODS vs. Global Ship Lease
Performance |
| Timeline |
| EBRO FOODS |
| Global Ship Lease |
EBRO FOODS and Global Ship Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EBRO FOODS and Global Ship
The main advantage of trading using opposite EBRO FOODS and Global Ship positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EBRO FOODS position performs unexpectedly, Global Ship 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 Global Ship will offset losses from the drop in Global Ship's long position.| EBRO FOODS vs. Inspire Medical Systems | EBRO FOODS vs. MidCap Financial Investment | EBRO FOODS vs. SLR Investment Corp | EBRO FOODS vs. MGIC INVESTMENT |
| Global Ship vs. NorAm Drilling AS | Global Ship vs. Mitsui Chemicals | Global Ship vs. TIANDE CHEMICAL | Global Ship vs. Sekisui Chemical Co |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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