Correlation Between Ecolab and Asia Carbon
Can any of the company-specific risk be diversified away by investing in both Ecolab and Asia Carbon 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 Ecolab and Asia Carbon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ecolab Inc and Asia Carbon Industries, you can compare the effects of market volatilities on Ecolab and Asia Carbon 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 Ecolab with a short position of Asia Carbon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ecolab and Asia Carbon.
Diversification Opportunities for Ecolab and Asia Carbon
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Ecolab and Asia is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Ecolab Inc and Asia Carbon Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia Carbon Industries and Ecolab 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 Ecolab Inc are associated (or correlated) with Asia Carbon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia Carbon Industries has no effect on the direction of Ecolab i.e., Ecolab and Asia Carbon go up and down completely randomly.
Pair Corralation between Ecolab and Asia Carbon
If you would invest 24,620 in Ecolab Inc on November 27, 2024 and sell it today you would earn a total of 1,761 from holding Ecolab Inc or generate 7.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ecolab Inc vs. Asia Carbon Industries
Performance |
| Timeline |
| Ecolab Inc |
| Asia Carbon Industries |
Ecolab and Asia Carbon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ecolab and Asia Carbon
The main advantage of trading using opposite Ecolab and Asia Carbon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ecolab position performs unexpectedly, Asia Carbon 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 Asia Carbon will offset losses from the drop in Asia Carbon's long position.| Ecolab vs. Linde plc Ordinary | Ecolab vs. PPG Industries | Ecolab vs. Sherwin Williams Co | Ecolab vs. LyondellBasell Industries NV |
| Asia Carbon vs. Avoca LLC | Asia Carbon vs. AGC Inc ADR | Asia Carbon vs. Arkema SA ADR | Asia Carbon vs. AirBoss of America |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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