Correlation Between EDreams Odigeo and Grifols SA

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

By analyzing existing cross correlation between eDreams Odigeo SA and Grifols SA, you can compare the effects of market volatilities on EDreams Odigeo and Grifols SA 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 EDreams Odigeo with a short position of Grifols SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of EDreams Odigeo and Grifols SA.

Diversification Opportunities for EDreams Odigeo and Grifols SA

0.6

Correlation Coefficient

EDreams Odigeo  Grifols SA

Poor diversification

The 3 months correlation between EDreams and Grifols is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding eDreams Odigeo SA and Grifols SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grifols SA and EDreams Odigeo 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 eDreams Odigeo SA are associated (or correlated) with Grifols SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grifols SA has no effect on the direction of EDreams Odigeo i.e., EDreams Odigeo and Grifols SA go up and down completely randomly.

Pair Corralation between EDreams Odigeo and Grifols SA

Assuming the 90 days trading horizon EDreams Odigeo is expected to generate 2.38 times less return on investment than Grifols SA. In addition to that, EDreams Odigeo is 1.0 times more volatile than Grifols SA. It trades about 0.11 of its total potential returns per unit of risk. Grifols SA is currently generating about 0.27 per unit of volatility. If you would invest  851.00  in Grifols SA on April 25, 2025 and sell it today you would earn a total of  338.00  from holding Grifols SA or generate 39.72% return on investment over 90 days.

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

eDreams Odigeo SA  vs.  Grifols SA

eDreams Odigeo SA

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in eDreams Odigeo SA are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, EDreams Odigeo exhibited solid returns over the last few months and may actually be approaching a breakup point.

Grifols SA

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Grifols SA are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Grifols SA exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with EDreams Odigeo and Grifols SA

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

The idea behind eDreams Odigeo SA and Grifols 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.