Correlation Between Echo Investment and ECC Games
Can any of the company-specific risk be diversified away by investing in both Echo Investment and ECC Games 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 Echo Investment and ECC Games into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Echo Investment SA and ECC Games SA, you can compare the effects of market volatilities on Echo Investment and ECC Games 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 Echo Investment with a short position of ECC Games. Check out your portfolio center. Please also check ongoing floating volatility patterns of Echo Investment and ECC Games.
Diversification Opportunities for Echo Investment and ECC Games
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Echo and ECC is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Echo Investment SA and ECC Games SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ECC Games SA and Echo Investment 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 Echo Investment SA are associated (or correlated) with ECC Games. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ECC Games SA has no effect on the direction of Echo Investment i.e., Echo Investment and ECC Games go up and down completely randomly.
Pair Corralation between Echo Investment and ECC Games
Assuming the 90 days trading horizon Echo Investment SA is expected to generate 0.36 times more return on investment than ECC Games. However, Echo Investment SA is 2.75 times less risky than ECC Games. It trades about 0.06 of its potential returns per unit of risk. ECC Games SA is currently generating about -0.01 per unit of risk. If you would invest 282.00 in Echo Investment SA on September 3, 2024 and sell it today you would earn a total of 154.00 from holding Echo Investment SA or generate 54.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 96.77% |
| Values | Daily Returns |
Echo Investment SA vs. ECC Games SA
Performance |
| Timeline |
| Echo Investment SA |
| ECC Games SA |
Echo Investment and ECC Games Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Echo Investment and ECC Games
The main advantage of trading using opposite Echo Investment and ECC Games positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Echo Investment position performs unexpectedly, ECC Games 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 ECC Games will offset losses from the drop in ECC Games' long position.| Echo Investment vs. Asseco Business Solutions | Echo Investment vs. Kogeneracja SA | Echo Investment vs. Asseco South Eastern | Echo Investment vs. Movie Games SA |
| ECC Games vs. Movie Games SA | ECC Games vs. Echo Investment SA | ECC Games vs. MCI Management SA | ECC Games vs. Skyline Investment SA |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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