Correlation Between Ecotel Communication and MICRONIC MYDATA

Can any of the company-specific risk be diversified away by investing in both Ecotel Communication and MICRONIC MYDATA 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 Ecotel Communication and MICRONIC MYDATA into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ecotel communication ag and MICRONIC MYDATA, you can compare the effects of market volatilities on Ecotel Communication and MICRONIC MYDATA 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 Ecotel Communication with a short position of MICRONIC MYDATA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ecotel Communication and MICRONIC MYDATA.

Diversification Opportunities for Ecotel Communication and MICRONIC MYDATA

0.68

Correlation Coefficient

Ecotel Communication  MICRONIC MYDATA

Poor diversification

The 3 months correlation between Ecotel and MICRONIC is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding ecotel communication ag and MICRONIC MYDATA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MICRONIC MYDATA and Ecotel Communication 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 ecotel communication ag are associated (or correlated) with MICRONIC MYDATA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MICRONIC MYDATA has no effect on the direction of Ecotel Communication i.e., Ecotel Communication and MICRONIC MYDATA go up and down completely randomly.

Pair Corralation between Ecotel Communication and MICRONIC MYDATA

Assuming the 90 days trading horizon ecotel communication ag is expected to under-perform the MICRONIC MYDATA. But the stock apears to be less risky and, when comparing its historical volatility, ecotel communication ag is 1.48 times less risky than MICRONIC MYDATA. The stock trades about -0.12 of its potential returns per unit of risk. The MICRONIC MYDATA is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest  3,634  in MICRONIC MYDATA on October 12, 2024 and sell it today you would lose (88.00) from holding MICRONIC MYDATA or give up 2.42% of portfolio value over 90 days.

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

ecotel communication ag  vs.  MICRONIC MYDATA

ecotel communication

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in ecotel communication ag are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile fundamental indicators, Ecotel Communication may actually be approaching a critical reversion point that can send shares even higher in February 2025.

MICRONIC MYDATA

Risk-Adjusted Performance

4 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in MICRONIC MYDATA are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, MICRONIC MYDATA may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Ecotel Communication and MICRONIC MYDATA

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

The idea behind ecotel communication ag and MICRONIC MYDATA 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.