Correlation Between Ecolab and Vita Coco
Can any of the company-specific risk be diversified away by investing in both Ecolab and Vita Coco 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 Vita Coco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ecolab Inc and Vita Coco, you can compare the effects of market volatilities on Ecolab and Vita Coco 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 Vita Coco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ecolab and Vita Coco.
Diversification Opportunities for Ecolab and Vita Coco
Very good diversification
The 3 months correlation between Ecolab and Vita is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Ecolab Inc and Vita Coco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vita Coco 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 Vita Coco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vita Coco has no effect on the direction of Ecolab i.e., Ecolab and Vita Coco go up and down completely randomly.
Pair Corralation between Ecolab and Vita Coco
Considering the 90-day investment horizon Ecolab Inc is expected to under-perform the Vita Coco. But the stock apears to be less risky and, when comparing its historical volatility, Ecolab Inc is 3.15 times less risky than Vita Coco. The stock trades about -0.16 of its potential returns per unit of risk. The Vita Coco is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 2,960 in Vita Coco on August 29, 2024 and sell it today you would earn a total of 631.00 from holding Vita Coco or generate 21.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ecolab Inc vs. Vita Coco
Performance |
| Timeline |
| Ecolab Inc |
| Vita Coco |
Ecolab and Vita Coco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ecolab and Vita Coco
The main advantage of trading using opposite Ecolab and Vita Coco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ecolab position performs unexpectedly, Vita Coco 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 Vita Coco will offset losses from the drop in Vita Coco's long position.| Ecolab vs. Linde plc Ordinary | Ecolab vs. PPG Industries | Ecolab vs. Sherwin Williams Co | Ecolab vs. LyondellBasell Industries NV |
| Vita Coco vs. Celsius Holdings | Vita Coco vs. Coca Cola European Partners | Vita Coco vs. Capital Income Builder | Vita Coco vs. Direxion Daily FTSE |
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.
Other Complementary Tools
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets |