Correlation Between Ebro Foods and Proeduca Altus
Can any of the company-specific risk be diversified away by investing in both Ebro Foods and Proeduca Altus 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 Proeduca Altus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ebro Foods and Proeduca Altus SA, you can compare the effects of market volatilities on Ebro Foods and Proeduca Altus 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 Proeduca Altus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ebro Foods and Proeduca Altus.
Diversification Opportunities for Ebro Foods and Proeduca Altus
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ebro and Proeduca is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Ebro Foods and Proeduca Altus SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Proeduca Altus 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 Proeduca Altus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Proeduca Altus SA has no effect on the direction of Ebro Foods i.e., Ebro Foods and Proeduca Altus go up and down completely randomly.
Pair Corralation between Ebro Foods and Proeduca Altus
Assuming the 90 days trading horizon Ebro Foods is expected to generate 0.47 times more return on investment than Proeduca Altus. However, Ebro Foods is 2.12 times less risky than Proeduca Altus. It trades about -0.07 of its potential returns per unit of risk. Proeduca Altus SA is currently generating about -0.11 per unit of risk. If you would invest 1,630 in Ebro Foods on September 5, 2024 and sell it today you would lose (26.00) from holding Ebro Foods or give up 1.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Ebro Foods vs. Proeduca Altus SA
Performance |
| Timeline |
| Ebro Foods |
| Proeduca Altus SA |
Ebro Foods and Proeduca Altus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ebro Foods and Proeduca Altus
The main advantage of trading using opposite Ebro Foods and Proeduca Altus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ebro Foods position performs unexpectedly, Proeduca Altus 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 Proeduca Altus will offset losses from the drop in Proeduca Altus' long position.| Ebro Foods vs. Viscofan | Ebro Foods vs. Enags SA | Ebro Foods vs. Mapfre | Ebro Foods vs. Cia de Distribucion |
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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 Transaction History module to view history of all your transactions and understand their impact on performance.
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