Correlation Between Ebro Foods and Primary Health
Can any of the company-specific risk be diversified away by investing in both Ebro Foods and Primary Health 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 Primary Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ebro Foods and Primary Health Properties, you can compare the effects of market volatilities on Ebro Foods and Primary Health 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 Primary Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ebro Foods and Primary Health.
Diversification Opportunities for Ebro Foods and Primary Health
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ebro and Primary is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Ebro Foods and Primary Health Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Primary Health Properties 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 Primary Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Primary Health Properties has no effect on the direction of Ebro Foods i.e., Ebro Foods and Primary Health go up and down completely randomly.
Pair Corralation between Ebro Foods and Primary Health
Assuming the 90 days trading horizon Ebro Foods is expected to generate 0.62 times more return on investment than Primary Health. However, Ebro Foods is 1.63 times less risky than Primary Health. It trades about 0.09 of its potential returns per unit of risk. Primary Health Properties is currently generating about -0.04 per unit of risk. If you would invest 1,686 in Ebro Foods on April 24, 2025 and sell it today you would earn a total of 60.00 from holding Ebro Foods or generate 3.56% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Ebro Foods vs. Primary Health Properties
Performance |
Timeline |
Ebro Foods |
Primary Health Properties |
Ebro Foods and Primary Health Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ebro Foods and Primary Health
The main advantage of trading using opposite Ebro Foods and Primary Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ebro Foods position performs unexpectedly, Primary Health 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 Primary Health will offset losses from the drop in Primary Health's long position.Ebro Foods vs. Sealed Air Corp | Ebro Foods vs. Allianz Technology Trust | Ebro Foods vs. Sdiptech AB | Ebro Foods vs. Wizz Air Holdings |
Primary Health vs. Jacquet Metal Service | Primary Health vs. Automatic Data Processing | Primary Health vs. Metals Exploration Plc | Primary Health vs. Resolute Mining Limited |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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