Correlation Between CI Financial and Ecolab
Can any of the company-specific risk be diversified away by investing in both CI Financial 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 CI Financial and Ecolab into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CI Financial Corp and Ecolab Inc, you can compare the effects of market volatilities on CI Financial 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 CI Financial with a short position of Ecolab. Check out your portfolio center. Please also check ongoing floating volatility patterns of CI Financial and Ecolab.
Diversification Opportunities for CI Financial and Ecolab
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between CIXXF and Ecolab is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding CI Financial Corp and Ecolab Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ecolab Inc and CI Financial 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 CI Financial 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 CI Financial i.e., CI Financial and Ecolab go up and down completely randomly.
Pair Corralation between CI Financial and Ecolab
Assuming the 90 days horizon CI Financial Corp is expected to generate 1.76 times more return on investment than Ecolab. However, CI Financial is 1.76 times more volatile than Ecolab Inc. It trades about 0.24 of its potential returns per unit of risk. Ecolab Inc is currently generating about 0.09 per unit of risk. If you would invest 1,090 in CI Financial Corp on August 31, 2024 and sell it today you would earn a total of 122.00 from holding CI Financial Corp or generate 11.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 4.4% |
| Values | Daily Returns |
CI Financial Corp vs. Ecolab Inc
Performance |
| Timeline |
| CI Financial Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Ecolab Inc |
CI Financial and Ecolab Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CI Financial and Ecolab
The main advantage of trading using opposite CI Financial and Ecolab positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CI Financial 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.| CI Financial vs. Ecolab Inc | CI Financial vs. CF Industries Holdings | CI Financial vs. Air Products and | CI Financial vs. Cebu Air ADR |
| Ecolab vs. Linde plc Ordinary | Ecolab vs. PPG Industries | Ecolab vs. Sherwin Williams Co | Ecolab vs. LyondellBasell Industries NV |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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