Correlation Between Borges Agricultural and Ebro Foods
Can any of the company-specific risk be diversified away by investing in both Borges Agricultural and Ebro Foods 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 Borges Agricultural and Ebro Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Borges Agricultural Industrial and Ebro Foods, you can compare the effects of market volatilities on Borges Agricultural and Ebro Foods 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 Borges Agricultural with a short position of Ebro Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Borges Agricultural and Ebro Foods.
Diversification Opportunities for Borges Agricultural and Ebro Foods
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Borges and Ebro is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Borges Agricultural Industrial and Ebro Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ebro Foods and Borges Agricultural 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 Borges Agricultural Industrial are associated (or correlated) with Ebro Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ebro Foods has no effect on the direction of Borges Agricultural i.e., Borges Agricultural and Ebro Foods go up and down completely randomly.
Pair Corralation between Borges Agricultural and Ebro Foods
Assuming the 90 days trading horizon Borges Agricultural Industrial is expected to generate 0.71 times more return on investment than Ebro Foods. However, Borges Agricultural Industrial is 1.42 times less risky than Ebro Foods. It trades about 0.06 of its potential returns per unit of risk. Ebro Foods is currently generating about -0.15 per unit of risk. If you would invest 290.00 in Borges Agricultural Industrial on August 24, 2024 and sell it today you would earn a total of 2.00 from holding Borges Agricultural Industrial or generate 0.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Borges Agricultural Industrial vs. Ebro Foods
Performance |
| Timeline |
| Borges Agricultural |
| Ebro Foods |
Borges Agricultural and Ebro Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Borges Agricultural and Ebro Foods
The main advantage of trading using opposite Borges Agricultural and Ebro Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Borges Agricultural position performs unexpectedly, Ebro Foods 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 Ebro Foods will offset losses from the drop in Ebro Foods' long position.| Borges Agricultural vs. Naturhouse Health SA | Borges Agricultural vs. Ebro Foods | Borges Agricultural vs. Caixabank SA | Borges Agricultural vs. All Iron Re |
| Ebro Foods vs. Viscofan | Ebro Foods vs. Enags SA | Ebro Foods vs. Mapfre | Ebro Foods vs. Cia de Distribucion |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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