Correlation Between Labiana Health and Ebro Foods
Can any of the company-specific risk be diversified away by investing in both Labiana Health 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 Labiana Health and Ebro Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Labiana Health SA and Ebro Foods, you can compare the effects of market volatilities on Labiana Health 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 Labiana Health with a short position of Ebro Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Labiana Health and Ebro Foods.
Diversification Opportunities for Labiana Health and Ebro Foods
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Labiana and Ebro is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Labiana Health SA and Ebro Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ebro Foods and Labiana Health 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 Labiana Health SA 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 Labiana Health i.e., Labiana Health and Ebro Foods go up and down completely randomly.
Pair Corralation between Labiana Health and Ebro Foods
Assuming the 90 days trading horizon Labiana Health SA is expected to under-perform the Ebro Foods. In addition to that, Labiana Health is 4.86 times more volatile than Ebro Foods. It trades about -0.13 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 1,620 in Ebro Foods on August 25, 2024 and sell it today you would lose (18.00) from holding Ebro Foods or give up 1.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Labiana Health SA vs. Ebro Foods
Performance |
| Timeline |
| Labiana Health SA |
| Ebro Foods |
Labiana Health and Ebro Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Labiana Health and Ebro Foods
The main advantage of trading using opposite Labiana Health and Ebro Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Labiana Health 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.| Labiana Health vs. Technomeca Aerospace SA | Labiana Health vs. Squirrel Media SA | Labiana Health vs. NH Hoteles | Labiana Health vs. Techo Hogar SOCIMI, |
| Ebro Foods vs. Enags SA | Ebro Foods vs. Mapfre | Ebro Foods vs. Cia de Distribucion | Ebro Foods vs. ACS Actividades de |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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