Correlation Between Esprinet SpA and Ebro Foods
Can any of the company-specific risk be diversified away by investing in both Esprinet SpA 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 Esprinet SpA and Ebro Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Esprinet SpA and Ebro Foods SA, you can compare the effects of market volatilities on Esprinet SpA 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 Esprinet SpA with a short position of Ebro Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Esprinet SpA and Ebro Foods.
Diversification Opportunities for Esprinet SpA and Ebro Foods
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Esprinet and Ebro is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Esprinet SpA and Ebro Foods SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ebro Foods SA and Esprinet SpA 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 Esprinet SpA 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 SA has no effect on the direction of Esprinet SpA i.e., Esprinet SpA and Ebro Foods go up and down completely randomly.
Pair Corralation between Esprinet SpA and Ebro Foods
Assuming the 90 days trading horizon Esprinet SpA is expected to under-perform the Ebro Foods. In addition to that, Esprinet SpA is 3.56 times more volatile than Ebro Foods SA. It trades about -0.04 of its total potential returns per unit of risk. Ebro Foods SA is currently generating about -0.05 per unit of volatility. If you would invest 1,588 in Ebro Foods SA on September 28, 2024 and sell it today you would lose (8.00) from holding Ebro Foods SA or give up 0.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Esprinet SpA vs. Ebro Foods SA
Performance |
| Timeline |
| Esprinet SpA |
| Ebro Foods SA |
Esprinet SpA and Ebro Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Esprinet SpA and Ebro Foods
The main advantage of trading using opposite Esprinet SpA and Ebro Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Esprinet SpA 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.| Esprinet SpA vs. Air Lease | Esprinet SpA vs. FUYO GENERAL LEASE | Esprinet SpA vs. Kaufman Broad SA | Esprinet SpA vs. Elmos Semiconductor SE |
| Ebro Foods vs. Kaufman Broad SA | Ebro Foods vs. BRIT AMER TOBACCO | Ebro Foods vs. LG Display Co | Ebro Foods vs. COLUMBIA SPORTSWEAR |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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