Correlation Between Ebro Foods and Tamburi Investment

Can any of the company-specific risk be diversified away by investing in both Ebro Foods and Tamburi Investment 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 Ebro Foods and Tamburi Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ebro Foods and Tamburi Investment Partners, you can compare the effects of market volatilities on Ebro Foods and Tamburi Investment 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 Ebro Foods with a short position of Tamburi Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ebro Foods and Tamburi Investment.

Diversification Opportunities for Ebro Foods and Tamburi Investment

-0.21

Correlation Coefficient

Ebro Foods  Tamburi Investment

Very good diversification

The 3 months correlation between Ebro and Tamburi is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Ebro Foods and Tamburi Investment Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tamburi Investment and Ebro Foods 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 Ebro Foods are associated (or correlated) with Tamburi Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tamburi Investment has no effect on the direction of Ebro Foods i.e., Ebro Foods and Tamburi Investment go up and down completely randomly.

Pair Corralation between Ebro Foods and Tamburi Investment

Assuming the 90 days trading horizon Ebro Foods is expected to generate 0.61 times more return on investment than Tamburi Investment. However, Ebro Foods is 1.64 times less risky than Tamburi Investment. It trades about 0.17 of its potential returns per unit of risk. Tamburi Investment Partners is currently generating about -0.14 per unit of risk. If you would invest  1,578  in Ebro Foods on December 28, 2024 and sell it today you would earn a total of  103.00  from holding Ebro Foods or generate 6.53% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Ebro Foods  vs.  Tamburi Investment Partners

Ebro Foods

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ebro Foods are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Ebro Foods may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Tamburi Investment

Risk-Adjusted Performance

Very Weak

Over the last 90 days Tamburi Investment Partners has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest conflicting performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Ebro Foods and Tamburi Investment

The main advantage of trading using opposite Ebro Foods and Tamburi Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ebro Foods position performs unexpectedly, Tamburi Investment 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 Tamburi Investment will offset losses from the drop in Tamburi Investment's long position.

The idea behind Ebro Foods and Tamburi Investment Partners pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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.