Correlation Between Hormel Foods and Ebro Foods
Can any of the company-specific risk be diversified away by investing in both Hormel Foods 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 Hormel Foods and Ebro Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hormel Foods and Ebro Foods SA, you can compare the effects of market volatilities on Hormel Foods 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 Hormel Foods with a short position of Ebro Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hormel Foods and Ebro Foods.
Diversification Opportunities for Hormel Foods and Ebro Foods
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hormel and Ebro is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Hormel Foods 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 Hormel 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 Hormel Foods 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 Hormel Foods i.e., Hormel Foods and Ebro Foods go up and down completely randomly.
Pair Corralation between Hormel Foods and Ebro Foods
Assuming the 90 days horizon Hormel Foods is expected to under-perform the Ebro Foods. In addition to that, Hormel Foods is 1.6 times more volatile than Ebro Foods SA. It trades about -0.03 of its total potential returns per unit of risk. Ebro Foods SA is currently generating about 0.02 per unit of volatility. If you would invest 1,464 in Ebro Foods SA on November 6, 2024 and sell it today you would earn a total of 142.00 from holding Ebro Foods SA or generate 9.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hormel Foods vs. Ebro Foods SA
Performance |
| Timeline |
| Hormel Foods |
| Ebro Foods SA |
Hormel Foods and Ebro Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hormel Foods and Ebro Foods
The main advantage of trading using opposite Hormel Foods and Ebro Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hormel Foods 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.| Hormel Foods vs. Check Point Software | Hormel Foods vs. Alfa Financial Software | Hormel Foods vs. GigaMedia | Hormel Foods vs. Take Two Interactive Software |
| Ebro Foods vs. SINGAPORE AIRLINES | Ebro Foods vs. Gol Intelligent Airlines | Ebro Foods vs. Tradegate AG Wertpapierhandelsbank | Ebro Foods vs. China Eastern Airlines |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
Other Complementary Tools
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Equity Valuation Check real value of public entities based on technical and fundamental data |