Correlation Between Robot SA and Ebro Foods
Can any of the company-specific risk be diversified away by investing in both Robot SA 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 Robot SA and Ebro Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Robot SA and Ebro Foods, you can compare the effects of market volatilities on Robot SA 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 Robot SA with a short position of Ebro Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Robot SA and Ebro Foods.
Diversification Opportunities for Robot SA and Ebro Foods
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Robot and Ebro is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Robot SA and Ebro Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ebro Foods and Robot SA 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 Robot 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 Robot SA i.e., Robot SA and Ebro Foods go up and down completely randomly.
Pair Corralation between Robot SA and Ebro Foods
Assuming the 90 days trading horizon Robot SA is expected to generate 3.2 times more return on investment than Ebro Foods. However, Robot SA is 3.2 times more volatile than Ebro Foods. It trades about 0.02 of its potential returns per unit of risk. Ebro Foods is currently generating about 0.01 per unit of risk. If you would invest 180.00 in Robot SA on August 28, 2024 and sell it today you would earn a total of 3.00 from holding Robot SA or generate 1.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.72% |
| Values | Daily Returns |
Robot SA vs. Ebro Foods
Performance |
| Timeline |
| Robot SA |
| Ebro Foods |
Robot SA and Ebro Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Robot SA and Ebro Foods
The main advantage of trading using opposite Robot SA and Ebro Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Robot SA 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.| Robot SA vs. Metrovacesa SA | Robot SA vs. Elecnor SA | Robot SA vs. Mapfre | Robot SA vs. Tander Inversiones SOCIMI |
| 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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