Correlation Between Media Investment and Ebro Foods
Can any of the company-specific risk be diversified away by investing in both Media Investment 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 Media Investment and Ebro Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Media Investment Optimization and Ebro Foods, you can compare the effects of market volatilities on Media Investment 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 Media Investment with a short position of Ebro Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Media Investment and Ebro Foods.
Diversification Opportunities for Media Investment and Ebro Foods
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Media and Ebro is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Media Investment Optimization and Ebro Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ebro Foods and Media Investment 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 Media Investment Optimization 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 Media Investment i.e., Media Investment and Ebro Foods go up and down completely randomly.
Pair Corralation between Media Investment and Ebro Foods
Assuming the 90 days trading horizon Media Investment Optimization is expected to under-perform the Ebro Foods. In addition to that, Media Investment is 2.44 times more volatile than Ebro Foods. It trades about -0.15 of its total potential returns per unit of risk. Ebro Foods is currently generating about -0.07 per unit of volatility. If you would invest 1,630 in Ebro Foods on September 4, 2024 and sell it today you would lose (26.00) from holding Ebro Foods or give up 1.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Media Investment Optimization vs. Ebro Foods
Performance |
| Timeline |
| Media Investment Opt |
| Ebro Foods |
Media Investment and Ebro Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Media Investment and Ebro Foods
The main advantage of trading using opposite Media Investment and Ebro Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Media Investment 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.| Media Investment vs. Ebro Foods | Media Investment vs. Tier1 Technology SA | Media Investment vs. Cellnex Telecom SA | Media Investment vs. Inhome Prime Properties |
| Ebro Foods vs. Viscofan | Ebro Foods vs. Enags SA | Ebro Foods vs. Mapfre | Ebro Foods vs. Cia de Distribucion |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| CEOs Directory Screen CEOs from public companies around the world |