Correlation Between Ebro Foods and KeyCorp

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

By analyzing existing cross correlation between Ebro Foods SA and KeyCorp, you can compare the effects of market volatilities on Ebro Foods and KeyCorp 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 KeyCorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ebro Foods and KeyCorp.

Diversification Opportunities for Ebro Foods and KeyCorp

0.0

Correlation Coefficient

Ebro Foods  KeyCorp

Pay attention - limited upside

The 3 months correlation between Ebro and KeyCorp is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Ebro Foods SA and KeyCorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KeyCorp 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 SA are associated (or correlated) with KeyCorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KeyCorp has no effect on the direction of Ebro Foods i.e., Ebro Foods and KeyCorp go up and down completely randomly.

Pair Corralation between Ebro Foods and KeyCorp

If you would invest (100.00) in KeyCorp on October 6, 2024 and sell it today you would earn a total of  100.00  from holding KeyCorp or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Ebro Foods SA  vs.  KeyCorp

Ebro Foods SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ebro Foods SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Ebro Foods is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

KeyCorp

Risk-Adjusted Performance

0 of 100

Modest

Over the last 90 days KeyCorp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, KeyCorp is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Ebro Foods and KeyCorp

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

The idea behind Ebro Foods SA and KeyCorp 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.

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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.