Correlation Between INDUSTRIAL MEDICAL and ECOBANK TRANSNATIONAL

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

By analyzing existing cross correlation between INDUSTRIAL MEDICAL GASES and ECOBANK TRANSNATIONAL INCORPORATED, you can compare the effects of market volatilities on INDUSTRIAL MEDICAL and ECOBANK TRANSNATIONAL 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 INDUSTRIAL MEDICAL with a short position of ECOBANK TRANSNATIONAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of INDUSTRIAL MEDICAL and ECOBANK TRANSNATIONAL.

Diversification Opportunities for INDUSTRIAL MEDICAL and ECOBANK TRANSNATIONAL

0.55

Correlation Coefficient

INDUSTRIAL MEDICAL  ECOBANK TRANSNATIONAL

Very weak diversification

The 3 months correlation between INDUSTRIAL and ECOBANK is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding INDUSTRIAL MEDICAL GASES and ECOBANK TRANSNATIONAL INCORPOR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ECOBANK TRANSNATIONAL and INDUSTRIAL MEDICAL 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 INDUSTRIAL MEDICAL GASES are associated (or correlated) with ECOBANK TRANSNATIONAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ECOBANK TRANSNATIONAL has no effect on the direction of INDUSTRIAL MEDICAL i.e., INDUSTRIAL MEDICAL and ECOBANK TRANSNATIONAL go up and down completely randomly.

Pair Corralation between INDUSTRIAL MEDICAL and ECOBANK TRANSNATIONAL

Assuming the 90 days trading horizon INDUSTRIAL MEDICAL is expected to generate 55.05 times less return on investment than ECOBANK TRANSNATIONAL. But when comparing it to its historical volatility, INDUSTRIAL MEDICAL GASES is 163.32 times less risky than ECOBANK TRANSNATIONAL. It trades about 0.13 of its potential returns per unit of risk. ECOBANK TRANSNATIONAL INCORPORATED is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  2,800  in ECOBANK TRANSNATIONAL INCORPORATED on December 26, 2024 and sell it today you would earn a total of  140.00  from holding ECOBANK TRANSNATIONAL INCORPORATED or generate 5.0% return on investment over 90 days.

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

INDUSTRIAL MEDICAL GASES  vs.  ECOBANK TRANSNATIONAL INCORPOR

INDUSTRIAL MEDICAL GASES

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in INDUSTRIAL MEDICAL GASES are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, INDUSTRIAL MEDICAL is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

ECOBANK TRANSNATIONAL

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in ECOBANK TRANSNATIONAL INCORPORATED are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, ECOBANK TRANSNATIONAL may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with INDUSTRIAL MEDICAL and ECOBANK TRANSNATIONAL

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

The idea behind INDUSTRIAL MEDICAL GASES and ECOBANK TRANSNATIONAL INCORPORATED 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 Commodity Directory module to find actively traded commodities issued by global exchanges.