Correlation Between Ecolab and Paragon Offshore
Can any of the company-specific risk be diversified away by investing in both Ecolab and Paragon Offshore 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 Paragon Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ecolab Inc and Paragon Offshore Plc, you can compare the effects of market volatilities on Ecolab and Paragon Offshore 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 Paragon Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ecolab and Paragon Offshore.
Diversification Opportunities for Ecolab and Paragon Offshore
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Ecolab and Paragon is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Ecolab Inc and Paragon Offshore Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Paragon Offshore Plc 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 Paragon Offshore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Paragon Offshore Plc has no effect on the direction of Ecolab i.e., Ecolab and Paragon Offshore go up and down completely randomly.
Pair Corralation between Ecolab and Paragon Offshore
If you would invest (100.00) in Paragon Offshore Plc on September 13, 2024 and sell it today you would earn a total of 100.00 from holding Paragon Offshore Plc or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Ecolab Inc vs. Paragon Offshore Plc
Performance |
| Timeline |
| Ecolab Inc |
| Paragon Offshore Plc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Ecolab and Paragon Offshore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ecolab and Paragon Offshore
The main advantage of trading using opposite Ecolab and Paragon Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ecolab position performs unexpectedly, Paragon Offshore 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 Paragon Offshore will offset losses from the drop in Paragon Offshore's long position.| Ecolab vs. LyondellBasell Industries NV | Ecolab vs. International Flavors Fragrances | Ecolab vs. Cabot | Ecolab vs. Westlake Chemical |
| Paragon Offshore vs. Analog Devices | Paragon Offshore vs. Tower Semiconductor | Paragon Offshore vs. National CineMedia | Paragon Offshore vs. Amkor Technology |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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