Correlation Between Moneysupermarket and Ebro Foods
Can any of the company-specific risk be diversified away by investing in both Moneysupermarket 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 Moneysupermarket and Ebro Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MoneysupermarketCom Group PLC and Ebro Foods, you can compare the effects of market volatilities on Moneysupermarket 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 Moneysupermarket with a short position of Ebro Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Moneysupermarket and Ebro Foods.
Diversification Opportunities for Moneysupermarket and Ebro Foods
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Moneysupermarket and Ebro is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding MoneysupermarketCom Group PLC and Ebro Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ebro Foods and Moneysupermarket 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 MoneysupermarketCom Group PLC 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 Moneysupermarket i.e., Moneysupermarket and Ebro Foods go up and down completely randomly.
Pair Corralation between Moneysupermarket and Ebro Foods
Assuming the 90 days trading horizon MoneysupermarketCom Group PLC is expected to generate 3.12 times more return on investment than Ebro Foods. However, Moneysupermarket is 3.12 times more volatile than Ebro Foods. It trades about 0.27 of its potential returns per unit of risk. Ebro Foods is currently generating about 0.24 per unit of risk. If you would invest 18,160 in MoneysupermarketCom Group PLC on November 28, 2024 and sell it today you would earn a total of 1,940 from holding MoneysupermarketCom Group PLC or generate 10.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MoneysupermarketCom Group PLC vs. Ebro Foods
Performance |
| Timeline |
| MoneysupermarketCom |
| Ebro Foods |
Moneysupermarket and Ebro Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Moneysupermarket and Ebro Foods
The main advantage of trading using opposite Moneysupermarket and Ebro Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Moneysupermarket 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.| Moneysupermarket vs. SMA Solar Technology | Moneysupermarket vs. Vitec Software Group | Moneysupermarket vs. Raytheon Technologies Corp | Moneysupermarket vs. Micron Technology |
| Ebro Foods vs. Roper Technologies | Ebro Foods vs. Check Point Software | Ebro Foods vs. Allianz Technology Trust | Ebro Foods vs. Southwest Airlines Co |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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