Correlation Between Ecolab and Lupaka Gold
Can any of the company-specific risk be diversified away by investing in both Ecolab and Lupaka Gold 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 Lupaka Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ecolab Inc and Lupaka Gold Corp, you can compare the effects of market volatilities on Ecolab and Lupaka Gold 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 Lupaka Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ecolab and Lupaka Gold.
Diversification Opportunities for Ecolab and Lupaka Gold
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Ecolab and Lupaka is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Ecolab Inc and Lupaka Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lupaka Gold Corp 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 Lupaka Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lupaka Gold Corp has no effect on the direction of Ecolab i.e., Ecolab and Lupaka Gold go up and down completely randomly.
Pair Corralation between Ecolab and Lupaka Gold
Considering the 90-day investment horizon Ecolab is expected to generate 37.61 times less return on investment than Lupaka Gold. But when comparing it to its historical volatility, Ecolab Inc is 44.86 times less risky than Lupaka Gold. It trades about 0.09 of its potential returns per unit of risk. Lupaka Gold Corp is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 5.00 in Lupaka Gold Corp on August 30, 2024 and sell it today you would lose (2.17) from holding Lupaka Gold Corp or give up 43.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 94.55% |
| Values | Daily Returns |
Ecolab Inc vs. Lupaka Gold Corp
Performance |
| Timeline |
| Ecolab Inc |
| Lupaka Gold Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Ecolab and Lupaka Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ecolab and Lupaka Gold
The main advantage of trading using opposite Ecolab and Lupaka Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ecolab position performs unexpectedly, Lupaka Gold 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 Lupaka Gold will offset losses from the drop in Lupaka Gold's long position.| Ecolab vs. Linde plc Ordinary | Ecolab vs. PPG Industries | Ecolab vs. Sherwin Williams Co | Ecolab vs. LyondellBasell Industries NV |
| Lupaka Gold vs. Ecovyst | Lupaka Gold vs. Ecolab Inc | Lupaka Gold vs. The Gap, | Lupaka Gold vs. Luxfer Holdings 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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