Correlation Between Ebro Foods and GlobalData PLC

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

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

Diversification Opportunities for Ebro Foods and GlobalData PLC

-0.28

Correlation Coefficient

Ebro Foods  GlobalData PLC

Very good diversification

The 3 months correlation between Ebro and GlobalData is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Ebro Foods and GlobalData PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GlobalData PLC 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 GlobalData PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GlobalData PLC has no effect on the direction of Ebro Foods i.e., Ebro Foods and GlobalData PLC go up and down completely randomly.

Pair Corralation between Ebro Foods and GlobalData PLC

Assuming the 90 days trading horizon Ebro Foods is expected to generate 1.44 times less return on investment than GlobalData PLC. But when comparing it to its historical volatility, Ebro Foods is 6.97 times less risky than GlobalData PLC. It trades about 0.09 of its potential returns per unit of risk. GlobalData PLC is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  14,000  in GlobalData PLC on April 23, 2025 and sell it today you would lose (50.00) from holding GlobalData PLC or give up 0.36% of portfolio value over 90 days.

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

Ebro Foods  vs.  GlobalData PLC

Ebro Foods

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ebro Foods are ranked lower than 7 (%) 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 newest stock price uproar, may contribute to short-horizon losses for the private investors.

GlobalData PLC

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in GlobalData PLC are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, GlobalData PLC is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Ebro Foods and GlobalData PLC

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

The idea behind Ebro Foods and GlobalData PLC 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.