Correlation Between Ebro Foods and Pfizer
Can any of the company-specific risk be diversified away by investing in both Ebro Foods and Pfizer 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 Pfizer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ebro Foods SA and Pfizer Inc, you can compare the effects of market volatilities on Ebro Foods and Pfizer 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 Pfizer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ebro Foods and Pfizer.
Diversification Opportunities for Ebro Foods and Pfizer
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Ebro and Pfizer is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Ebro Foods SA and Pfizer Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pfizer Inc 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 SA are associated (or correlated) with Pfizer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pfizer Inc has no effect on the direction of Ebro Foods i.e., Ebro Foods and Pfizer go up and down completely randomly.
Pair Corralation between Ebro Foods and Pfizer
Assuming the 90 days horizon Ebro Foods is expected to generate 1.26 times less return on investment than Pfizer. But when comparing it to its historical volatility, Ebro Foods SA is 1.78 times less risky than Pfizer. It trades about 0.01 of its potential returns per unit of risk. Pfizer Inc is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 2,534 in Pfizer Inc on September 26, 2024 and sell it today you would earn a total of 0.00 from holding Pfizer Inc or generate 0.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Ebro Foods SA vs. Pfizer Inc
Performance |
Timeline |
Ebro Foods SA |
Pfizer Inc |
Ebro Foods and Pfizer Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ebro Foods and Pfizer
The main advantage of trading using opposite Ebro Foods and Pfizer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ebro Foods position performs unexpectedly, Pfizer 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 Pfizer will offset losses from the drop in Pfizer's long position.Ebro Foods vs. Mowi ASA | Ebro Foods vs. LEROY SEAFOOD GRUNSPADR | Ebro Foods vs. Lery Seafood Group | Ebro Foods vs. Nisshin Seifun Group |
Pfizer vs. American Eagle Outfitters | Pfizer vs. KAUFMAN ET BROAD | Pfizer vs. Ebro Foods SA | Pfizer vs. Broadridge Financial Solutions |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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