Correlation Between NBI Bearings and Ebro Foods
Can any of the company-specific risk be diversified away by investing in both NBI Bearings 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 NBI Bearings and Ebro Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NBI Bearings Europe and Ebro Foods, you can compare the effects of market volatilities on NBI Bearings 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 NBI Bearings with a short position of Ebro Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of NBI Bearings and Ebro Foods.
Diversification Opportunities for NBI Bearings and Ebro Foods
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NBI and Ebro is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding NBI Bearings Europe and Ebro Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ebro Foods and NBI Bearings 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 NBI Bearings Europe 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 NBI Bearings i.e., NBI Bearings and Ebro Foods go up and down completely randomly.
Pair Corralation between NBI Bearings and Ebro Foods
Assuming the 90 days trading horizon NBI Bearings Europe is expected to generate 2.87 times more return on investment than Ebro Foods. However, NBI Bearings is 2.87 times more volatile than Ebro Foods. It trades about 0.07 of its potential returns per unit of risk. Ebro Foods is currently generating about 0.02 per unit of risk. If you would invest 400.00 in NBI Bearings Europe on November 3, 2024 and sell it today you would earn a total of 10.00 from holding NBI Bearings Europe or generate 2.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NBI Bearings Europe vs. Ebro Foods
Performance |
| Timeline |
| NBI Bearings Europe |
| Ebro Foods |
NBI Bearings and Ebro Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NBI Bearings and Ebro Foods
The main advantage of trading using opposite NBI Bearings and Ebro Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NBI Bearings 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.| NBI Bearings vs. Arrienda Rental Properties | NBI Bearings vs. Aedas Homes SL | NBI Bearings vs. Techo Hogar SOCIMI, | NBI Bearings vs. Tier1 Technology SA |
| 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
Other Complementary Tools
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Fundamental Analysis View fundamental data based on most recent published financial statements |