Correlation Between H B and Ecovyst

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

By analyzing existing cross correlation between H B Fuller and Ecovyst, you can compare the effects of market volatilities on H B and Ecovyst 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 H B with a short position of Ecovyst. Check out your portfolio center. Please also check ongoing floating volatility patterns of H B and Ecovyst.

Diversification Opportunities for H B and Ecovyst

0.58

Correlation Coefficient

H B  Ecovyst

Very weak diversification

The 3 months correlation between FUL and Ecovyst is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding H B Fuller and Ecovyst in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ecovyst and H B 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 H B Fuller are associated (or correlated) with Ecovyst. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ecovyst has no effect on the direction of H B i.e., H B and Ecovyst go up and down completely randomly.

Pair Corralation between H B and Ecovyst

Considering the 90-day investment horizon H B Fuller is expected to under-perform the Ecovyst. But the stock apears to be less risky and, when comparing its historical volatility, H B Fuller is 1.39 times less risky than Ecovyst. The stock trades about -0.12 of its potential returns per unit of risk. The Ecovyst is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest  750.00  in Ecovyst on December 28, 2024 and sell it today you would lose (96.00) from holding Ecovyst or give up 12.8% of portfolio value over 90 days.

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

H B Fuller  vs.  Ecovyst

H B Fuller

Risk-Adjusted Performance

Very Weak

Over the last 90 days H B Fuller has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Ecovyst

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ecovyst has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with H B and Ecovyst

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

The idea behind H B Fuller and Ecovyst 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.