Correlation Between EBRO FOODS and AURUBIS -

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

By analyzing existing cross correlation between EBRO FOODS and AURUBIS Dusseldorf, you can compare the effects of market volatilities on EBRO FOODS and AURUBIS - 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 AURUBIS -. Check out your portfolio center. Please also check ongoing floating volatility patterns of EBRO FOODS and AURUBIS -.

Diversification Opportunities for EBRO FOODS and AURUBIS -

0.61

Correlation Coefficient

EBRO FOODS  AURUBIS -

Poor diversification

The 3 months correlation between EBRO and AURUBIS is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding EBRO FOODS and AURUBIS Dusseldorf in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AURUBIS Dusseldorf 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 AURUBIS -. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AURUBIS Dusseldorf has no effect on the direction of EBRO FOODS i.e., EBRO FOODS and AURUBIS - go up and down completely randomly.

Pair Corralation between EBRO FOODS and AURUBIS -

Assuming the 90 days trading horizon EBRO FOODS is expected to generate 5.2 times less return on investment than AURUBIS -. But when comparing it to its historical volatility, EBRO FOODS is 2.28 times less risky than AURUBIS -. It trades about 0.06 of its potential returns per unit of risk. AURUBIS Dusseldorf is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  7,815  in AURUBIS Dusseldorf on December 20, 2024 and sell it today you would earn a total of  1,325  from holding AURUBIS Dusseldorf or generate 16.95% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

EBRO FOODS  vs.  AURUBIS Dusseldorf

EBRO FOODS

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in EBRO FOODS are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, EBRO FOODS is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

AURUBIS Dusseldorf

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in AURUBIS Dusseldorf are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, AURUBIS - unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with EBRO FOODS and AURUBIS -

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

The idea behind EBRO FOODS and AURUBIS Dusseldorf 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..