Correlation Between Vienna Insurance and Ebro Foods
Can any of the company-specific risk be diversified away by investing in both Vienna Insurance 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 Vienna Insurance and Ebro Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vienna Insurance Group and Ebro Foods, you can compare the effects of market volatilities on Vienna Insurance 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 Vienna Insurance with a short position of Ebro Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vienna Insurance and Ebro Foods.
Diversification Opportunities for Vienna Insurance and Ebro Foods
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Vienna and Ebro is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Vienna Insurance Group and Ebro Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ebro Foods and Vienna Insurance 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 Vienna Insurance 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 Vienna Insurance i.e., Vienna Insurance and Ebro Foods go up and down completely randomly.
Pair Corralation between Vienna Insurance and Ebro Foods
Assuming the 90 days trading horizon Vienna Insurance Group is expected to generate 1.55 times more return on investment than Ebro Foods. However, Vienna Insurance is 1.55 times more volatile than Ebro Foods. It trades about 0.38 of its potential returns per unit of risk. Ebro Foods is currently generating about 0.11 per unit of risk. If you would invest 2,915 in Vienna Insurance Group on December 2, 2024 and sell it today you would earn a total of 693.00 from holding Vienna Insurance Group or generate 23.77% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Vienna Insurance Group vs. Ebro Foods
Performance |
Timeline |
Vienna Insurance |
Ebro Foods |
Vienna Insurance and Ebro Foods Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Vienna Insurance and Ebro Foods
The main advantage of trading using opposite Vienna Insurance and Ebro Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vienna Insurance 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.Vienna Insurance vs. Arcticzymes Technologies ASA | Vienna Insurance vs. Advanced Medical Solutions | Vienna Insurance vs. Ondine Biomedical | Vienna Insurance vs. United Utilities Group |
Ebro Foods vs. Aeorema Communications Plc | Ebro Foods vs. Spire Healthcare Group | Ebro Foods vs. Batm Advanced Communications | Ebro Foods vs. Various Eateries PLC |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
Other Complementary Tools
Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes |