Correlation Between Ecolab and Summit Environmental
Can any of the company-specific risk be diversified away by investing in both Ecolab and Summit Environmental 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 Summit Environmental into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ecolab Inc and Summit Environmental, you can compare the effects of market volatilities on Ecolab and Summit Environmental 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 Summit Environmental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ecolab and Summit Environmental.
Diversification Opportunities for Ecolab and Summit Environmental
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Ecolab and Summit is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Ecolab Inc and Summit Environmental in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Summit Environmental 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 Summit Environmental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Summit Environmental has no effect on the direction of Ecolab i.e., Ecolab and Summit Environmental go up and down completely randomly.
Pair Corralation between Ecolab and Summit Environmental
If you would invest 25,251 in Ecolab Inc on December 1, 2024 and sell it today you would earn a total of 1,467 from holding Ecolab Inc or generate 5.81% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Ecolab Inc vs. Summit Environmental
Performance |
Timeline |
Ecolab Inc |
Summit Environmental |
Ecolab and Summit Environmental Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ecolab and Summit Environmental
The main advantage of trading using opposite Ecolab and Summit Environmental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ecolab position performs unexpectedly, Summit Environmental 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 Summit Environmental will offset losses from the drop in Summit Environmental's long position.Ecolab vs. Linde plc Ordinary | Ecolab vs. PPG Industries | Ecolab vs. Sherwin Williams Co | Ecolab vs. LyondellBasell Industries NV |
Summit Environmental vs. Teradyne | Summit Environmental vs. Paranovus Entertainment Technology | Summit Environmental vs. KLA Tencor | Summit Environmental vs. United Microelectronics |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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