Correlation Between Superior Plus and Ecolab
Can any of the company-specific risk be diversified away by investing in both Superior Plus 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 Superior Plus and Ecolab into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Superior Plus Corp and Ecolab Inc, you can compare the effects of market volatilities on Superior Plus 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 Superior Plus with a short position of Ecolab. Check out your portfolio center. Please also check ongoing floating volatility patterns of Superior Plus and Ecolab.
Diversification Opportunities for Superior Plus and Ecolab
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Superior and Ecolab is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Superior Plus Corp and Ecolab Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ecolab Inc and Superior Plus 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 Superior Plus Corp 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 Superior Plus i.e., Superior Plus and Ecolab go up and down completely randomly.
Pair Corralation between Superior Plus and Ecolab
Assuming the 90 days horizon Superior Plus Corp is expected to under-perform the Ecolab. In addition to that, Superior Plus is 3.38 times more volatile than Ecolab Inc. It trades about -0.01 of its total potential returns per unit of risk. Ecolab Inc is currently generating about 0.03 per unit of volatility. If you would invest 23,310 in Ecolab Inc on August 29, 2024 and sell it today you would earn a total of 190.00 from holding Ecolab Inc or generate 0.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Superior Plus Corp vs. Ecolab Inc
Performance |
| Timeline |
| Superior Plus Corp |
| Ecolab Inc |
Superior Plus and Ecolab Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Superior Plus and Ecolab
The main advantage of trading using opposite Superior Plus and Ecolab positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Superior Plus 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.| Superior Plus vs. Meli Hotels International | Superior Plus vs. InterContinental Hotels Group | Superior Plus vs. PT Bank Maybank | Superior Plus vs. Pebblebrook Hotel Trust |
| Ecolab vs. Linde plc | Ecolab vs. Superior Plus Corp | Ecolab vs. NMI Holdings | Ecolab vs. SIVERS SEMICONDUCTORS AB |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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