Correlation Between EBRO FOODS and MAG Silver
Can any of the company-specific risk be diversified away by investing in both EBRO FOODS and MAG Silver 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 MAG Silver into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EBRO FOODS and MAG Silver Corp, you can compare the effects of market volatilities on EBRO FOODS and MAG Silver 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 MAG Silver. Check out your portfolio center. Please also check ongoing floating volatility patterns of EBRO FOODS and MAG Silver.
Diversification Opportunities for EBRO FOODS and MAG Silver
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between EBRO and MAG is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding EBRO FOODS and MAG Silver Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MAG Silver Corp 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 MAG Silver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MAG Silver Corp has no effect on the direction of EBRO FOODS i.e., EBRO FOODS and MAG Silver go up and down completely randomly.
Pair Corralation between EBRO FOODS and MAG Silver
Assuming the 90 days trading horizon EBRO FOODS is expected to generate 0.4 times more return on investment than MAG Silver. However, EBRO FOODS is 2.5 times less risky than MAG Silver. It trades about 0.1 of its potential returns per unit of risk. MAG Silver Corp is currently generating about -0.12 per unit of risk. If you would invest 1,578 in EBRO FOODS on October 13, 2024 and sell it today you would earn a total of 24.00 from holding EBRO FOODS or generate 1.52% 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. MAG Silver Corp
Performance |
| Timeline |
| EBRO FOODS |
| MAG Silver Corp |
EBRO FOODS and MAG Silver Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EBRO FOODS and MAG Silver
The main advantage of trading using opposite EBRO FOODS and MAG Silver positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EBRO FOODS position performs unexpectedly, MAG Silver 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 MAG Silver will offset losses from the drop in MAG Silver's long position.| EBRO FOODS vs. NORWEGIAN AIR SHUT | EBRO FOODS vs. ALTAIR RES INC | EBRO FOODS vs. Ryanair Holdings plc | EBRO FOODS vs. FORWARD AIR P |
| MAG Silver vs. Nomad Foods | MAG Silver vs. Astral Foods Limited | MAG Silver vs. EBRO FOODS | MAG Silver vs. RYU Apparel |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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