Correlation Between Compagnie Plastic and Ebro Foods
Can any of the company-specific risk be diversified away by investing in both Compagnie Plastic 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 Compagnie Plastic and Ebro Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Compagnie Plastic Omnium and Ebro Foods SA, you can compare the effects of market volatilities on Compagnie Plastic 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 Compagnie Plastic with a short position of Ebro Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compagnie Plastic and Ebro Foods.
Diversification Opportunities for Compagnie Plastic and Ebro Foods
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Compagnie and Ebro is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Compagnie Plastic Omnium 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 Compagnie Plastic 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 Compagnie Plastic Omnium 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 Compagnie Plastic i.e., Compagnie Plastic and Ebro Foods go up and down completely randomly.
Pair Corralation between Compagnie Plastic and Ebro Foods
Assuming the 90 days horizon Compagnie Plastic Omnium is expected to under-perform the Ebro Foods. In addition to that, Compagnie Plastic is 2.55 times more volatile than Ebro Foods SA. It trades about -0.01 of its total potential returns per unit of risk. Ebro Foods SA is currently generating about 0.04 per unit of volatility. If you would invest 1,488 in Ebro Foods SA on October 12, 2024 and sell it today you would earn a total of 86.00 from holding Ebro Foods SA or generate 5.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Compagnie Plastic Omnium vs. Ebro Foods SA
Performance |
| Timeline |
| Compagnie Plastic Omnium |
| Ebro Foods SA |
Compagnie Plastic and Ebro Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compagnie Plastic and Ebro Foods
The main advantage of trading using opposite Compagnie Plastic and Ebro Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compagnie Plastic 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.| Compagnie Plastic vs. MeVis Medical Solutions | Compagnie Plastic vs. PDS Biotechnology Corp | Compagnie Plastic vs. IMAGIN MEDICAL INC | Compagnie Plastic vs. AGF Management Limited |
| Ebro Foods vs. ARDAGH METAL PACDL 0001 | Ebro Foods vs. GOODYEAR T RUBBER | Ebro Foods vs. Jacquet Metal Service | Ebro Foods vs. JD SPORTS FASH |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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