Correlation Between Ecopro and Sambo Corrugated
Can any of the company-specific risk be diversified away by investing in both Ecopro and Sambo Corrugated 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 Ecopro and Sambo Corrugated into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ecopro Co and Sambo Corrugated Board, you can compare the effects of market volatilities on Ecopro and Sambo Corrugated 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 Ecopro with a short position of Sambo Corrugated. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ecopro and Sambo Corrugated.
Diversification Opportunities for Ecopro and Sambo Corrugated
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ecopro and Sambo is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Ecopro Co and Sambo Corrugated Board in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sambo Corrugated Board and Ecopro 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 Ecopro Co are associated (or correlated) with Sambo Corrugated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sambo Corrugated Board has no effect on the direction of Ecopro i.e., Ecopro and Sambo Corrugated go up and down completely randomly.
Pair Corralation between Ecopro and Sambo Corrugated
Assuming the 90 days trading horizon Ecopro Co is expected to generate 4.98 times more return on investment than Sambo Corrugated. However, Ecopro is 4.98 times more volatile than Sambo Corrugated Board. It trades about 0.07 of its potential returns per unit of risk. Sambo Corrugated Board is currently generating about -0.03 per unit of risk. If you would invest 2,310,680 in Ecopro Co on September 5, 2024 and sell it today you would earn a total of 4,819,320 from holding Ecopro Co or generate 208.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 97.72% |
| Values | Daily Returns |
Ecopro Co vs. Sambo Corrugated Board
Performance |
| Timeline |
| Ecopro |
| Sambo Corrugated Board |
Ecopro and Sambo Corrugated Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ecopro and Sambo Corrugated
The main advantage of trading using opposite Ecopro and Sambo Corrugated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ecopro position performs unexpectedly, Sambo Corrugated 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 Sambo Corrugated will offset losses from the drop in Sambo Corrugated's long position.| Ecopro vs. LG Chemicals | Ecopro vs. Lotte Chemical Corp | Ecopro vs. Hyundai Steel | Ecopro vs. Dongkuk Steel Mill |
| Sambo Corrugated vs. Hanil Iron Steel | Sambo Corrugated vs. Pungguk Ethanol Industrial | Sambo Corrugated vs. Dongbu Steel Co | Sambo Corrugated vs. Aprogen Healthcare Games |
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.
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