Correlation Between Edita Food and Ebro Foods
Can any of the company-specific risk be diversified away by investing in both Edita Food 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 Edita Food and Ebro Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Edita Food Industries and Ebro Foods, you can compare the effects of market volatilities on Edita Food 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 Edita Food with a short position of Ebro Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Edita Food and Ebro Foods.
Diversification Opportunities for Edita Food and Ebro Foods
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Edita and Ebro is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Edita Food Industries and Ebro Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ebro Foods and Edita Food 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 Edita Food Industries 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 Edita Food i.e., Edita Food and Ebro Foods go up and down completely randomly.
Pair Corralation between Edita Food and Ebro Foods
Assuming the 90 days trading horizon Edita Food Industries is expected to under-perform the Ebro Foods. In addition to that, Edita Food is 9.09 times more volatile than Ebro Foods. It trades about -0.2 of its total potential returns per unit of risk. Ebro Foods is currently generating about -0.05 per unit of volatility. If you would invest 1,616 in Ebro Foods on August 28, 2024 and sell it today you would lose (12.00) from holding Ebro Foods or give up 0.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Edita Food Industries vs. Ebro Foods
Performance |
| Timeline |
| Edita Food Industries |
| Ebro Foods |
Edita Food and Ebro Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Edita Food and Ebro Foods
The main advantage of trading using opposite Edita Food and Ebro Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Edita Food 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.| Edita Food vs. Samsung Electronics Co | Edita Food vs. Samsung Electronics Co | Edita Food vs. Hyundai Motor | Edita Food vs. Toyota Motor Corp |
| Ebro Foods vs. Roadside Real Estate | Ebro Foods vs. International Biotechnology Trust | Ebro Foods vs. Broadridge Financial Solutions | Ebro Foods vs. Norman Broadbent Plc |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
Other Complementary Tools
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing |