Correlation Between Castellana Properties and Ebro Foods
Can any of the company-specific risk be diversified away by investing in both Castellana Properties 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 Castellana Properties and Ebro Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Castellana Properties Socimi and Ebro Foods, you can compare the effects of market volatilities on Castellana Properties 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 Castellana Properties with a short position of Ebro Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Castellana Properties and Ebro Foods.
Diversification Opportunities for Castellana Properties and Ebro Foods
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Castellana and Ebro is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Castellana Properties Socimi and Ebro Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ebro Foods and Castellana Properties 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 Castellana Properties Socimi 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 Castellana Properties i.e., Castellana Properties and Ebro Foods go up and down completely randomly.
Pair Corralation between Castellana Properties and Ebro Foods
Assuming the 90 days trading horizon Castellana Properties Socimi is expected to generate 0.36 times more return on investment than Ebro Foods. However, Castellana Properties Socimi is 2.81 times less risky than Ebro Foods. It trades about 0.22 of its potential returns per unit of risk. Ebro Foods is currently generating about -0.03 per unit of risk. If you would invest 670.00 in Castellana Properties Socimi on August 27, 2024 and sell it today you would earn a total of 10.00 from holding Castellana Properties Socimi or generate 1.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Castellana Properties Socimi vs. Ebro Foods
Performance |
| Timeline |
| Castellana Properties |
| Ebro Foods |
Castellana Properties and Ebro Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Castellana Properties and Ebro Foods
The main advantage of trading using opposite Castellana Properties and Ebro Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Castellana Properties 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.| Castellana Properties vs. Arrienda Rental Properties | Castellana Properties vs. Caixabank SA | Castellana Properties vs. NH Hoteles | Castellana Properties vs. Ebro Foods |
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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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