Correlation Between Ecolab and Inflection Point
Can any of the company-specific risk be diversified away by investing in both Ecolab and Inflection Point 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 Inflection Point into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ecolab Inc and Inflection Point Acquisition, you can compare the effects of market volatilities on Ecolab and Inflection Point 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 Inflection Point. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ecolab and Inflection Point.
Diversification Opportunities for Ecolab and Inflection Point
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ecolab and Inflection is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Ecolab Inc and Inflection Point Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inflection Point Acq 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 Inflection Point. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inflection Point Acq has no effect on the direction of Ecolab i.e., Ecolab and Inflection Point go up and down completely randomly.
Pair Corralation between Ecolab and Inflection Point
Considering the 90-day investment horizon Ecolab Inc is expected to under-perform the Inflection Point. But the stock apears to be less risky and, when comparing its historical volatility, Ecolab Inc is 8.33 times less risky than Inflection Point. The stock trades about -0.08 of its potential returns per unit of risk. The Inflection Point Acquisition is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 1,086 in Inflection Point Acquisition on September 13, 2024 and sell it today you would earn a total of 404.00 from holding Inflection Point Acquisition or generate 37.2% 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. Inflection Point Acquisition
Performance |
| Timeline |
| Ecolab Inc |
| Inflection Point Acq |
Ecolab and Inflection Point Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ecolab and Inflection Point
The main advantage of trading using opposite Ecolab and Inflection Point positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ecolab position performs unexpectedly, Inflection Point 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 Inflection Point will offset losses from the drop in Inflection Point's long position.| Ecolab vs. LyondellBasell Industries NV | Ecolab vs. International Flavors Fragrances | Ecolab vs. Cabot | Ecolab vs. Westlake Chemical |
| Inflection Point vs. Meiwu Technology Co | Inflection Point vs. Sea | Inflection Point vs. Pool Corporation | Inflection Point vs. Boston Properties |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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