Correlation Between Ecovyst and SunOpta
Can any of the company-specific risk be diversified away by investing in both Ecovyst and SunOpta 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 Ecovyst and SunOpta into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ecovyst and SunOpta, you can compare the effects of market volatilities on Ecovyst and SunOpta 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 Ecovyst with a short position of SunOpta. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ecovyst and SunOpta.
Diversification Opportunities for Ecovyst and SunOpta
Very poor diversification
The 3 months correlation between Ecovyst and SunOpta is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Ecovyst and SunOpta in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SunOpta and Ecovyst 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 Ecovyst are associated (or correlated) with SunOpta. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SunOpta has no effect on the direction of Ecovyst i.e., Ecovyst and SunOpta go up and down completely randomly.
Pair Corralation between Ecovyst and SunOpta
Given the investment horizon of 90 days Ecovyst is expected to generate 0.75 times more return on investment than SunOpta. However, Ecovyst is 1.34 times less risky than SunOpta. It trades about 0.11 of its potential returns per unit of risk. SunOpta is currently generating about -0.17 per unit of risk. If you would invest 769.00 in Ecovyst on October 22, 2024 and sell it today you would earn a total of 19.00 from holding Ecovyst or generate 2.47% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Ecovyst vs. SunOpta
Performance |
Timeline |
Ecovyst |
SunOpta |
Ecovyst and SunOpta Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ecovyst and SunOpta
The main advantage of trading using opposite Ecovyst and SunOpta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ecovyst position performs unexpectedly, SunOpta 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 SunOpta will offset losses from the drop in SunOpta's long position.Ecovyst vs. Orion Engineered Carbons | Ecovyst vs. Cabot | Ecovyst vs. Minerals Technologies | Ecovyst vs. Quaker Chemical |
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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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