Correlation Between EBRO FOODS and RETAIL FOOD
Can any of the company-specific risk be diversified away by investing in both EBRO FOODS and RETAIL FOOD 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 RETAIL FOOD into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EBRO FOODS and RETAIL FOOD GROUP, you can compare the effects of market volatilities on EBRO FOODS and RETAIL FOOD 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 RETAIL FOOD. Check out your portfolio center. Please also check ongoing floating volatility patterns of EBRO FOODS and RETAIL FOOD.
Diversification Opportunities for EBRO FOODS and RETAIL FOOD
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between EBRO and RETAIL is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding EBRO FOODS and RETAIL FOOD GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RETAIL FOOD GROUP 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 RETAIL FOOD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RETAIL FOOD GROUP has no effect on the direction of EBRO FOODS i.e., EBRO FOODS and RETAIL FOOD go up and down completely randomly.
Pair Corralation between EBRO FOODS and RETAIL FOOD
Assuming the 90 days trading horizon EBRO FOODS is expected to generate 0.18 times more return on investment than RETAIL FOOD. However, EBRO FOODS is 5.6 times less risky than RETAIL FOOD. It trades about 0.01 of its potential returns per unit of risk. RETAIL FOOD GROUP is currently generating about -0.24 per unit of risk. If you would invest 1,576 in EBRO FOODS on October 10, 2024 and sell it today you would earn a total of 2.00 from holding EBRO FOODS or generate 0.13% 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. RETAIL FOOD GROUP
Performance |
| Timeline |
| EBRO FOODS |
| RETAIL FOOD GROUP |
EBRO FOODS and RETAIL FOOD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EBRO FOODS and RETAIL FOOD
The main advantage of trading using opposite EBRO FOODS and RETAIL FOOD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EBRO FOODS position performs unexpectedly, RETAIL FOOD 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 RETAIL FOOD will offset losses from the drop in RETAIL FOOD's long position.| EBRO FOODS vs. SPORTING | EBRO FOODS vs. AECOM TECHNOLOGY | EBRO FOODS vs. Sunny Optical Technology | EBRO FOODS vs. Micron Technology |
| RETAIL FOOD vs. NTG Nordic Transport | RETAIL FOOD vs. FIREWEED METALS P | RETAIL FOOD vs. Columbia Sportswear | RETAIL FOOD vs. Jacquet Metal Service |
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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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