Correlation Between ECB Bancorp and Horizon Space
Can any of the company-specific risk be diversified away by investing in both ECB Bancorp and Horizon Space 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 ECB Bancorp and Horizon Space into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ECB Bancorp and Horizon Space Acquisition, you can compare the effects of market volatilities on ECB Bancorp and Horizon Space 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 ECB Bancorp with a short position of Horizon Space. Check out your portfolio center. Please also check ongoing floating volatility patterns of ECB Bancorp and Horizon Space.
Diversification Opportunities for ECB Bancorp and Horizon Space
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ECB and Horizon is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding ECB Bancorp and Horizon Space Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Horizon Space Acquisition and ECB Bancorp 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 ECB Bancorp are associated (or correlated) with Horizon Space. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Horizon Space Acquisition has no effect on the direction of ECB Bancorp i.e., ECB Bancorp and Horizon Space go up and down completely randomly.
Pair Corralation between ECB Bancorp and Horizon Space
Given the investment horizon of 90 days ECB Bancorp is expected to generate 2.51 times less return on investment than Horizon Space. In addition to that, ECB Bancorp is 1.56 times more volatile than Horizon Space Acquisition. It trades about 0.01 of its total potential returns per unit of risk. Horizon Space Acquisition is currently generating about 0.04 per unit of volatility. If you would invest 1,130 in Horizon Space Acquisition on August 31, 2024 and sell it today you would earn a total of 7.00 from holding Horizon Space Acquisition or generate 0.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ECB Bancorp vs. Horizon Space Acquisition
Performance |
| Timeline |
| ECB Bancorp |
| Horizon Space Acquisition |
ECB Bancorp and Horizon Space Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ECB Bancorp and Horizon Space
The main advantage of trading using opposite ECB Bancorp and Horizon Space positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ECB Bancorp position performs unexpectedly, Horizon Space 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 Horizon Space will offset losses from the drop in Horizon Space's long position.| ECB Bancorp vs. KeyCorp | ECB Bancorp vs. Comerica | ECB Bancorp vs. First Horizon National | ECB Bancorp vs. Western Alliance Bancorporation |
| Horizon Space vs. PowerUp Acquisition Corp | Horizon Space vs. HUMANA INC | Horizon Space vs. Aquagold International | Horizon Space vs. Barloworld Ltd ADR |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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