Correlation Between Ecolab and Bill
Can any of the company-specific risk be diversified away by investing in both Ecolab and Bill 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 Bill into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ecolab Inc and Bill Com Holdings, you can compare the effects of market volatilities on Ecolab and Bill 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 Bill. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ecolab and Bill.
Diversification Opportunities for Ecolab and Bill
Very good diversification
The 3 months correlation between Ecolab and Bill is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Ecolab Inc and Bill Com Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bill Com Holdings 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 Bill. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bill Com Holdings has no effect on the direction of Ecolab i.e., Ecolab and Bill go up and down completely randomly.
Pair Corralation between Ecolab and Bill
Considering the 90-day investment horizon Ecolab Inc is expected to generate 0.33 times more return on investment than Bill. However, Ecolab Inc is 3.0 times less risky than Bill. It trades about 0.09 of its potential returns per unit of risk. Bill Com Holdings is currently generating about 0.02 per unit of risk. If you would invest 14,660 in Ecolab Inc on August 28, 2024 and sell it today you would earn a total of 10,032 from holding Ecolab Inc or generate 68.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ecolab Inc vs. Bill Com Holdings
Performance |
| Timeline |
| Ecolab Inc |
| Bill Com Holdings |
Ecolab and Bill Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ecolab and Bill
The main advantage of trading using opposite Ecolab and Bill positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ecolab position performs unexpectedly, Bill 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 Bill will offset losses from the drop in Bill's long position.The idea behind Ecolab Inc and Bill Com Holdings pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
Other Complementary Tools
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators |