Correlation Between Akzo Nobel and Ecolab
Can any of the company-specific risk be diversified away by investing in both Akzo Nobel 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 Akzo Nobel and Ecolab into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Akzo Nobel NV and Ecolab Inc, you can compare the effects of market volatilities on Akzo Nobel 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 Akzo Nobel with a short position of Ecolab. Check out your portfolio center. Please also check ongoing floating volatility patterns of Akzo Nobel and Ecolab.
Diversification Opportunities for Akzo Nobel and Ecolab
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Akzo and Ecolab is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Akzo Nobel NV and Ecolab Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ecolab Inc and Akzo Nobel 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 Akzo Nobel NV 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 Akzo Nobel i.e., Akzo Nobel and Ecolab go up and down completely randomly.
Pair Corralation between Akzo Nobel and Ecolab
If you would invest 17,273 in Ecolab Inc on September 1, 2024 and sell it today you would earn a total of 7,604 from holding Ecolab Inc or generate 44.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 0.37% |
| Values | Daily Returns |
Akzo Nobel NV vs. Ecolab Inc
Performance |
| Timeline |
| Akzo Nobel NV |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Ecolab Inc |
Akzo Nobel and Ecolab Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Akzo Nobel and Ecolab
The main advantage of trading using opposite Akzo Nobel and Ecolab positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Akzo Nobel 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.| Akzo Nobel vs. Air Liquide SA | Akzo Nobel vs. BASF SE ADR | Akzo Nobel vs. Symrise Ag PK | Akzo Nobel vs. Asahi Kaisei Corp |
| Ecolab vs. Linde plc Ordinary | Ecolab vs. Air Products and | Ecolab vs. Aquagold International | Ecolab vs. Thrivent High Yield |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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