Correlation Between Bath Body and Ecofin Global
Can any of the company-specific risk be diversified away by investing in both Bath Body and Ecofin Global 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 Bath Body and Ecofin Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bath Body Works and Ecofin Global Utilities, you can compare the effects of market volatilities on Bath Body and Ecofin Global 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 Bath Body with a short position of Ecofin Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bath Body and Ecofin Global.
Diversification Opportunities for Bath Body and Ecofin Global
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bath and Ecofin is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Bath Body Works and Ecofin Global Utilities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ecofin Global Utilities and Bath Body 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 Bath Body Works are associated (or correlated) with Ecofin Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ecofin Global Utilities has no effect on the direction of Bath Body i.e., Bath Body and Ecofin Global go up and down completely randomly.
Pair Corralation between Bath Body and Ecofin Global
Assuming the 90 days trading horizon Bath Body Works is expected to generate 1.2 times more return on investment than Ecofin Global. However, Bath Body is 1.2 times more volatile than Ecofin Global Utilities. It trades about 0.12 of its potential returns per unit of risk. Ecofin Global Utilities is currently generating about 0.08 per unit of risk. If you would invest 3,664 in Bath Body Works on November 7, 2024 and sell it today you would earn a total of 133.00 from holding Bath Body Works or generate 3.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bath Body Works vs. Ecofin Global Utilities
Performance |
| Timeline |
| Bath Body Works |
| Ecofin Global Utilities |
Bath Body and Ecofin Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bath Body and Ecofin Global
The main advantage of trading using opposite Bath Body and Ecofin Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bath Body position performs unexpectedly, Ecofin Global 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 Ecofin Global will offset losses from the drop in Ecofin Global's long position.| Bath Body vs. McEwen Mining | Bath Body vs. GoldMining | Bath Body vs. National Beverage Corp | Bath Body vs. Molson Coors Beverage |
| Ecofin Global vs. Eastinco Mining Exploration | Ecofin Global vs. Atalaya Mining | Ecofin Global vs. Endeavour Mining Corp | Ecofin Global vs. Molson Coors Beverage |
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 CEOs Directory module to screen CEOs from public companies around the world.
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