Correlation Between EBRO FOODS and GOME Retail
Can any of the company-specific risk be diversified away by investing in both EBRO FOODS and GOME Retail 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 GOME Retail into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EBRO FOODS and GOME Retail Holdings, you can compare the effects of market volatilities on EBRO FOODS and GOME Retail 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 GOME Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of EBRO FOODS and GOME Retail.
Diversification Opportunities for EBRO FOODS and GOME Retail
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between EBRO and GOME is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding EBRO FOODS and GOME Retail Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GOME Retail Holdings 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 GOME Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GOME Retail Holdings has no effect on the direction of EBRO FOODS i.e., EBRO FOODS and GOME Retail go up and down completely randomly.
Pair Corralation between EBRO FOODS and GOME Retail
If you would invest 1,578 in EBRO FOODS on November 7, 2024 and sell it today you would earn a total of 34.00 from holding EBRO FOODS or generate 2.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
EBRO FOODS vs. GOME Retail Holdings
Performance |
| Timeline |
| EBRO FOODS |
| GOME Retail Holdings |
EBRO FOODS and GOME Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EBRO FOODS and GOME Retail
The main advantage of trading using opposite EBRO FOODS and GOME Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EBRO FOODS position performs unexpectedly, GOME Retail 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 GOME Retail will offset losses from the drop in GOME Retail's long position.| EBRO FOODS vs. 24SEVENOFFICE GROUP AB | EBRO FOODS vs. VIVA WINE GROUP | EBRO FOODS vs. ITALIAN WINE BRANDS | EBRO FOODS vs. NTG Nordic Transport |
| GOME Retail vs. HANOVER INSURANCE | GOME Retail vs. Laureate Education | GOME Retail vs. QBE Insurance Group | GOME Retail vs. REVO INSURANCE SPA |
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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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