Correlation Between CAMDEN and Ecolab

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

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

Diversification Opportunities for CAMDEN and Ecolab

0.0

Correlation Coefficient

CAMDEN  Ecolab

Pay attention - limited upside

The 3 months correlation between CAMDEN and Ecolab is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding CAMDEN PPTY TR and Ecolab Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ecolab Inc and CAMDEN 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 CAMDEN PPTY TR 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 CAMDEN i.e., CAMDEN and Ecolab go up and down completely randomly.

Pair Corralation between CAMDEN and Ecolab

If you would invest (100.00) in CAMDEN PPTY TR on October 6, 2024 and sell it today you would earn a total of  100.00  from holding CAMDEN PPTY TR or generate -100.0% return on investment over 90 days.

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

CAMDEN PPTY TR  vs.  Ecolab Inc

CAMDEN PPTY TR

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CAMDEN PPTY TR has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, CAMDEN is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Ecolab Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ecolab Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Stock's fundamental indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with CAMDEN and Ecolab

The main advantage of trading using opposite CAMDEN and Ecolab positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CAMDEN 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 CAMDEN PPTY TR 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.

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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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.