Correlation Between Organic Sales and Ecolab

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

By analyzing existing cross correlation between Organic Sales And and Ecolab Inc, you can compare the effects of market volatilities on Organic Sales and Ecolab 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 Organic Sales with a short position of Ecolab. Check out your portfolio center. Please also check ongoing floating volatility patterns of Organic Sales and Ecolab.

Diversification Opportunities for Organic Sales and Ecolab

0.0

Correlation Coefficient

Organic Sales  Ecolab

Pay attention - limited upside

The 3 months correlation between Organic and Ecolab is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Organic Sales And and Ecolab Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ecolab Inc and Organic Sales 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 Organic Sales And are associated (or correlated) with Ecolab. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ecolab Inc has no effect on the direction of Organic Sales i.e., Organic Sales and Ecolab go up and down completely randomly.

Pair Corralation between Organic Sales and Ecolab

If you would invest  23,391  in Ecolab Inc on December 28, 2024 and sell it today you would earn a total of  1,560  from holding Ecolab Inc or generate 6.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Organic Sales And  vs.  Ecolab Inc

Organic Sales And

Risk-Adjusted Performance

Very Weak

Over the last 90 days Organic Sales And has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Organic Sales is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Ecolab Inc

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ecolab Inc are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite quite unfluctuating fundamental indicators, Ecolab may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Organic Sales and Ecolab

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

The idea behind Organic Sales And and Ecolab Inc 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.

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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.