Correlation Between HomeToGo and EBRO FOODS
Can any of the company-specific risk be diversified away by investing in both HomeToGo 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 HomeToGo and EBRO FOODS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HomeToGo SE and EBRO FOODS, you can compare the effects of market volatilities on HomeToGo 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 HomeToGo with a short position of EBRO FOODS. Check out your portfolio center. Please also check ongoing floating volatility patterns of HomeToGo and EBRO FOODS.
Diversification Opportunities for HomeToGo and EBRO FOODS
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between HomeToGo and EBRO is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding HomeToGo SE and EBRO FOODS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EBRO FOODS and HomeToGo 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 HomeToGo SE 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 HomeToGo i.e., HomeToGo and EBRO FOODS go up and down completely randomly.
Pair Corralation between HomeToGo and EBRO FOODS
Assuming the 90 days trading horizon HomeToGo SE is expected to under-perform the EBRO FOODS. In addition to that, HomeToGo is 2.36 times more volatile than EBRO FOODS. It trades about -0.02 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 1,383 in EBRO FOODS on December 11, 2024 and sell it today you would earn a total of 249.00 from holding EBRO FOODS or generate 18.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
HomeToGo SE vs. EBRO FOODS
Performance |
| Timeline |
| HomeToGo SE |
| EBRO FOODS |
HomeToGo and EBRO FOODS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HomeToGo and EBRO FOODS
The main advantage of trading using opposite HomeToGo and EBRO FOODS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HomeToGo 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's long position.| HomeToGo vs. GOLDQUEST MINING | HomeToGo vs. China Datang | HomeToGo vs. CN DATANG C | HomeToGo vs. Linedata Services SA |
| EBRO FOODS vs. SLR Investment Corp | EBRO FOODS vs. MEDCAW INVESTMENTS LS 01 | EBRO FOODS vs. New Residential Investment | EBRO FOODS vs. VITEC SOFTWARE GROUP |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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