Correlation Between TOTAL GABON and EBRO FOODS
Can any of the company-specific risk be diversified away by investing in both TOTAL GABON 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 TOTAL GABON and EBRO FOODS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TOTAL GABON and EBRO FOODS, you can compare the effects of market volatilities on TOTAL GABON 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 TOTAL GABON with a short position of EBRO FOODS. Check out your portfolio center. Please also check ongoing floating volatility patterns of TOTAL GABON and EBRO FOODS.
Diversification Opportunities for TOTAL GABON and EBRO FOODS
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between TOTAL and EBRO is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding TOTAL GABON and EBRO FOODS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EBRO FOODS and TOTAL GABON 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 TOTAL GABON 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 TOTAL GABON i.e., TOTAL GABON and EBRO FOODS go up and down completely randomly.
Pair Corralation between TOTAL GABON and EBRO FOODS
Assuming the 90 days trading horizon TOTAL GABON is expected to generate 3.16 times more return on investment than EBRO FOODS. However, TOTAL GABON is 3.16 times more volatile than EBRO FOODS. It trades about 0.11 of its potential returns per unit of risk. EBRO FOODS is currently generating about 0.0 per unit of risk. If you would invest 15,850 in TOTAL GABON on September 12, 2024 and sell it today you would earn a total of 2,850 from holding TOTAL GABON or generate 17.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
TOTAL GABON vs. EBRO FOODS
Performance |
| Timeline |
| TOTAL GABON |
| EBRO FOODS |
TOTAL GABON and EBRO FOODS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TOTAL GABON and EBRO FOODS
The main advantage of trading using opposite TOTAL GABON and EBRO FOODS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TOTAL GABON 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's long position.| TOTAL GABON vs. SEALED AIR | TOTAL GABON vs. LAir Liquide SA | TOTAL GABON vs. DELTA AIR LINES | TOTAL GABON vs. GLG LIFE TECH |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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