Correlation Between Eco5tech and Igoria Trade

Can any of the company-specific risk be diversified away by investing in both Eco5tech and Igoria Trade 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 Eco5tech and Igoria Trade into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between eco5tech SA and Igoria Trade SA, you can compare the effects of market volatilities on Eco5tech and Igoria Trade 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 Eco5tech with a short position of Igoria Trade. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eco5tech and Igoria Trade.

Diversification Opportunities for Eco5tech and Igoria Trade

0.26

Correlation Coefficient

Eco5tech  Igoria Trade

Modest diversification

The 3 months correlation between Eco5tech and Igoria is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding eco5tech SA and Igoria Trade SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Igoria Trade SA and Eco5tech 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 eco5tech SA are associated (or correlated) with Igoria Trade. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Igoria Trade SA has no effect on the direction of Eco5tech i.e., Eco5tech and Igoria Trade go up and down completely randomly.

Pair Corralation between Eco5tech and Igoria Trade

Assuming the 90 days trading horizon eco5tech SA is expected to generate 1.75 times more return on investment than Igoria Trade. However, Eco5tech is 1.75 times more volatile than Igoria Trade SA. It trades about -0.02 of its potential returns per unit of risk. Igoria Trade SA is currently generating about -0.09 per unit of risk. If you would invest  115.00  in eco5tech SA on October 10, 2024 and sell it today you would lose (3.00) from holding eco5tech SA or give up 2.61% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	93.75%
Values	Daily Returns

eco5tech SA  vs.  Igoria Trade SA

eco5tech SA

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in eco5tech SA are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Eco5tech reported solid returns over the last few months and may actually be approaching a breakup point.

Igoria Trade SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Igoria Trade SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Igoria Trade is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Eco5tech and Igoria Trade

The main advantage of trading using opposite Eco5tech and Igoria Trade positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eco5tech position performs unexpectedly, Igoria Trade 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 Igoria Trade will offset losses from the drop in Igoria Trade's long position.

The idea behind eco5tech SA and Igoria Trade 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..