Correlation Between Ecolab and Atlas Air

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

By analyzing existing cross correlation between Ecolab Inc and Atlas Air Worldwide, you can compare the effects of market volatilities on Ecolab and Atlas Air 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 Ecolab with a short position of Atlas Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ecolab and Atlas Air.

Diversification Opportunities for Ecolab and Atlas Air

0.0

Correlation Coefficient

Ecolab  Atlas Air

Pay attention - limited upside

The 3 months correlation between Ecolab and Atlas is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Ecolab Inc and Atlas Air Worldwide in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atlas Air Worldwide and Ecolab 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 Ecolab Inc are associated (or correlated) with Atlas Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atlas Air Worldwide has no effect on the direction of Ecolab i.e., Ecolab and Atlas Air go up and down completely randomly.

Pair Corralation between Ecolab and Atlas Air

If you would invest  10,248  in Atlas Air Worldwide on October 24, 2024 and sell it today you would earn a total of  0.00  from holding Atlas Air Worldwide or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	5.56%
Values	Daily Returns

Ecolab Inc  vs.  Atlas Air Worldwide

Ecolab Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ecolab Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Stock's fundamental indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Atlas Air Worldwide

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Atlas Air Worldwide has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Atlas Air is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Ecolab and Atlas Air

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

The idea behind Ecolab Inc and Atlas Air Worldwide 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.