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 GR and Ebro Foods SA, 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

0.68

Correlation Coefficient

VIENNA INSURANCE  Ebro Foods

Poor diversification

The 3 months correlation between VIENNA and Ebro is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding VIENNA INSURANCE GR and Ebro Foods SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ebro Foods SA 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 GR 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 SA 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 GR is expected to generate 1.17 times more return on investment than Ebro Foods. However, VIENNA INSURANCE is 1.17 times more volatile than Ebro Foods SA. It trades about 0.4 of its potential returns per unit of risk. Ebro Foods SA is currently generating about 0.07 per unit of risk. If you would invest  3,015  in VIENNA INSURANCE GR on December 21, 2024 and sell it today you would earn a total of  950.00  from holding VIENNA INSURANCE GR or generate 31.51% return on investment over 90 days.

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

VIENNA INSURANCE GR  vs.  Ebro Foods SA

VIENNA INSURANCE

Risk-Adjusted Performance

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in VIENNA INSURANCE GR are ranked lower than 31 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, VIENNA INSURANCE unveiled solid returns over the last few months and may actually be approaching a breakup point.

Ebro Foods SA

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Ebro Foods SA are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Ebro Foods is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

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.

The idea behind VIENNA INSURANCE GR and Ebro Foods SA 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.