Correlation Between AECOM TECHNOLOGY and EBRO FOODS

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

By analyzing existing cross correlation between AECOM TECHNOLOGY and EBRO FOODS, you can compare the effects of market volatilities on AECOM TECHNOLOGY 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 AECOM TECHNOLOGY with a short position of EBRO FOODS. Check out your portfolio center. Please also check ongoing floating volatility patterns of AECOM TECHNOLOGY and EBRO FOODS.

Diversification Opportunities for AECOM TECHNOLOGY and EBRO FOODS

-0.52

Correlation Coefficient

AECOM TECHNOLOGY  EBRO FOODS

Excellent diversification

The 3 months correlation between AECOM and EBRO is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding AECOM TECHNOLOGY and EBRO FOODS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EBRO FOODS and AECOM TECHNOLOGY 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 AECOM TECHNOLOGY 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 AECOM TECHNOLOGY i.e., AECOM TECHNOLOGY and EBRO FOODS go up and down completely randomly.

Pair Corralation between AECOM TECHNOLOGY and EBRO FOODS

Assuming the 90 days trading horizon AECOM TECHNOLOGY is expected to under-perform the EBRO FOODS. In addition to that, AECOM TECHNOLOGY is 1.7 times more volatile than EBRO FOODS. It trades about -0.18 of its total potential returns per unit of risk. EBRO FOODS is currently generating about 0.06 per unit of volatility. If you would invest  1,570  in EBRO FOODS on December 20, 2024 and sell it today you would earn a total of  48.00  from holding EBRO FOODS or generate 3.06% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.33%
Values	Daily Returns

AECOM TECHNOLOGY  vs.  EBRO FOODS

AECOM TECHNOLOGY

Risk-Adjusted Performance

Very Weak

Over the last 90 days AECOM TECHNOLOGY has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

EBRO FOODS

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in EBRO FOODS are ranked lower than 5 (%) 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.

Pair Trading with AECOM TECHNOLOGY and EBRO FOODS

The main advantage of trading using opposite AECOM TECHNOLOGY and EBRO FOODS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AECOM TECHNOLOGY 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.

The idea behind AECOM TECHNOLOGY and EBRO FOODS 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 Commodity Directory module to find actively traded commodities issued by global exchanges.