Correlation Between Ebro Foods and Libertas 7
Can any of the company-specific risk be diversified away by investing in both Ebro Foods and Libertas 7 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 Libertas 7 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ebro Foods and Libertas 7 SA, you can compare the effects of market volatilities on Ebro Foods and Libertas 7 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 Libertas 7. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ebro Foods and Libertas 7.
Diversification Opportunities for Ebro Foods and Libertas 7
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ebro and Libertas is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Ebro Foods and Libertas 7 SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Libertas 7 SA 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 Libertas 7. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Libertas 7 SA has no effect on the direction of Ebro Foods i.e., Ebro Foods and Libertas 7 go up and down completely randomly.
Pair Corralation between Ebro Foods and Libertas 7
Assuming the 90 days trading horizon Ebro Foods is expected to generate 0.18 times more return on investment than Libertas 7. However, Ebro Foods is 5.48 times less risky than Libertas 7. It trades about -0.01 of its potential returns per unit of risk. Libertas 7 SA is currently generating about -0.01 per unit of risk. If you would invest 1,588 in Ebro Foods on October 13, 2024 and sell it today you would lose (2.00) from holding Ebro Foods or give up 0.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ebro Foods vs. Libertas 7 SA
Performance |
| Timeline |
| Ebro Foods |
| Libertas 7 SA |
Ebro Foods and Libertas 7 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ebro Foods and Libertas 7
The main advantage of trading using opposite Ebro Foods and Libertas 7 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ebro Foods position performs unexpectedly, Libertas 7 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 Libertas 7 will offset losses from the drop in Libertas 7's long position.| Ebro Foods vs. Viscofan | Ebro Foods vs. Enags SA | Ebro Foods vs. Mapfre | Ebro Foods vs. Cia de Distribucion |
| Libertas 7 vs. Parlem Telecom Companyia | Libertas 7 vs. Ebro Foods | Libertas 7 vs. Borges Agricultural Industrial | Libertas 7 vs. Plasticos Compuestos SA |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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