Correlation Between CVB Financial and EBRO FOODS
Can any of the company-specific risk be diversified away by investing in both CVB Financial 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 CVB Financial and EBRO FOODS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CVB Financial Corp and EBRO FOODS, you can compare the effects of market volatilities on CVB Financial 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 CVB Financial with a short position of EBRO FOODS. Check out your portfolio center. Please also check ongoing floating volatility patterns of CVB Financial and EBRO FOODS.
Diversification Opportunities for CVB Financial and EBRO FOODS
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CVB and EBRO is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding CVB Financial Corp and EBRO FOODS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EBRO FOODS and CVB Financial 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 CVB Financial Corp 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 CVB Financial i.e., CVB Financial and EBRO FOODS go up and down completely randomly.
Pair Corralation between CVB Financial and EBRO FOODS
Assuming the 90 days horizon CVB Financial Corp is expected to generate 1.79 times more return on investment than EBRO FOODS. However, CVB Financial is 1.79 times more volatile than EBRO FOODS. It trades about 0.01 of its potential returns per unit of risk. EBRO FOODS is currently generating about 0.02 per unit of risk. If you would invest 2,005 in CVB Financial Corp on October 16, 2024 and sell it today you would lose (35.00) from holding CVB Financial Corp or give up 1.75% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CVB Financial Corp vs. EBRO FOODS
Performance |
| Timeline |
| CVB Financial Corp |
| EBRO FOODS |
CVB Financial and EBRO FOODS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CVB Financial and EBRO FOODS
The main advantage of trading using opposite CVB Financial and EBRO FOODS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CVB Financial 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's long position.| CVB Financial vs. Haier Smart Home | CVB Financial vs. ADDUS HOMECARE | CVB Financial vs. Hisense Home Appliances | CVB Financial vs. CITIC Telecom International |
| EBRO FOODS vs. Synchrony Financial | EBRO FOODS vs. PNC Financial Services | EBRO FOODS vs. REVO INSURANCE SPA | EBRO FOODS vs. CVB Financial Corp |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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