Correlation Between Lery Seafood and EBRO FOODS
Can any of the company-specific risk be diversified away by investing in both Lery Seafood 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 Lery Seafood and EBRO FOODS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lery Seafood Group and EBRO FOODS, you can compare the effects of market volatilities on Lery Seafood 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 Lery Seafood with a short position of EBRO FOODS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lery Seafood and EBRO FOODS.
Diversification Opportunities for Lery Seafood and EBRO FOODS
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Lery and EBRO is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Lery Seafood Group and EBRO FOODS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EBRO FOODS and Lery Seafood 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 Lery Seafood Group 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 Lery Seafood i.e., Lery Seafood and EBRO FOODS go up and down completely randomly.
Pair Corralation between Lery Seafood and EBRO FOODS
Assuming the 90 days horizon Lery Seafood Group is expected to generate 2.13 times more return on investment than EBRO FOODS. However, Lery Seafood is 2.13 times more volatile than EBRO FOODS. It trades about 0.1 of its potential returns per unit of risk. EBRO FOODS is currently generating about 0.0 per unit of risk. If you would invest 408.00 in Lery Seafood Group on October 31, 2024 and sell it today you would earn a total of 54.00 from holding Lery Seafood Group or generate 13.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lery Seafood Group vs. EBRO FOODS
Performance |
| Timeline |
| Lery Seafood Group |
| EBRO FOODS |
Lery Seafood and EBRO FOODS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lery Seafood and EBRO FOODS
The main advantage of trading using opposite Lery Seafood and EBRO FOODS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lery Seafood 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.| Lery Seafood vs. Mowi ASA | Lery Seafood vs. LEROY SEAFOOD GRUNSPADR | Lery Seafood vs. Yihai International Holding | Lery Seafood vs. Lery Seafood Group |
| EBRO FOODS vs. Direct Line Insurance | EBRO FOODS vs. Synovus Financial Corp | EBRO FOODS vs. Virtu Financial | EBRO FOODS vs. CHIBA BANK |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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