Correlation Between Ebro Foods and Asturiana
Can any of the company-specific risk be diversified away by investing in both Ebro Foods and Asturiana 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 Asturiana into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ebro Foods and Asturiana de Laminados, you can compare the effects of market volatilities on Ebro Foods and Asturiana 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 Asturiana. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ebro Foods and Asturiana.
Diversification Opportunities for Ebro Foods and Asturiana
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ebro and Asturiana is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Ebro Foods and Asturiana de Laminados in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asturiana de Laminados 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 Asturiana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asturiana de Laminados has no effect on the direction of Ebro Foods i.e., Ebro Foods and Asturiana go up and down completely randomly.
Pair Corralation between Ebro Foods and Asturiana
Assuming the 90 days trading horizon Ebro Foods is expected to generate 0.18 times more return on investment than Asturiana. However, Ebro Foods is 5.71 times less risky than Asturiana. It trades about 0.03 of its potential returns per unit of risk. Asturiana de Laminados is currently generating about -0.03 per unit of risk. If you would invest 1,490 in Ebro Foods on September 14, 2024 and sell it today you would earn a total of 100.00 from holding Ebro Foods or generate 6.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.64% |
| Values | Daily Returns |
Ebro Foods vs. Asturiana de Laminados
Performance |
| Timeline |
| Ebro Foods |
| Asturiana de Laminados |
Ebro Foods and Asturiana Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ebro Foods and Asturiana
The main advantage of trading using opposite Ebro Foods and Asturiana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ebro Foods position performs unexpectedly, Asturiana 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 Asturiana will offset losses from the drop in Asturiana's long position.| Ebro Foods vs. Viscofan | Ebro Foods vs. Enags SA | Ebro Foods vs. Mapfre | Ebro Foods vs. Cia de Distribucion |
| Asturiana vs. Cellnex Telecom SA | Asturiana vs. Ebro Foods | Asturiana vs. Borges Agricultural Industrial | Asturiana vs. Elaia Investment Spain |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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