Correlation Between Ecolab and Comstock Holding
Can any of the company-specific risk be diversified away by investing in both Ecolab and Comstock Holding 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 Comstock Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ecolab Inc and Comstock Holding Companies, you can compare the effects of market volatilities on Ecolab and Comstock Holding 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 Comstock Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ecolab and Comstock Holding.
Diversification Opportunities for Ecolab and Comstock Holding
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ecolab and Comstock is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Ecolab Inc and Comstock Holding Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Comstock Holding Com 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 Comstock Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Comstock Holding Com has no effect on the direction of Ecolab i.e., Ecolab and Comstock Holding go up and down completely randomly.
Pair Corralation between Ecolab and Comstock Holding
Considering the 90-day investment horizon Ecolab is expected to generate 1.73 times less return on investment than Comstock Holding. But when comparing it to its historical volatility, Ecolab Inc is 3.04 times less risky than Comstock Holding. It trades about 0.09 of its potential returns per unit of risk. Comstock Holding Companies is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 444.00 in Comstock Holding Companies on September 1, 2024 and sell it today you would earn a total of 372.00 from holding Comstock Holding Companies or generate 83.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ecolab Inc vs. Comstock Holding Companies
Performance |
| Timeline |
| Ecolab Inc |
| Comstock Holding Com |
Ecolab and Comstock Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ecolab and Comstock Holding
The main advantage of trading using opposite Ecolab and Comstock Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ecolab position performs unexpectedly, Comstock Holding 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 Comstock Holding will offset losses from the drop in Comstock Holding's long position.| Ecolab vs. Linde plc Ordinary | Ecolab vs. Air Products and | Ecolab vs. Aquagold International | Ecolab vs. Thrivent High Yield |
| Comstock Holding vs. Arhaus Inc | Comstock Holding vs. Floor Decor Holdings | Comstock Holding vs. Haverty Furniture Companies | Comstock Holding vs. Kingfisher plc |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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