Correlation Between Ecolab and Palfinger
Can any of the company-specific risk be diversified away by investing in both Ecolab and Palfinger 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 Palfinger into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ecolab Inc and Palfinger AG, you can compare the effects of market volatilities on Ecolab and Palfinger 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 Palfinger. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ecolab and Palfinger.
Diversification Opportunities for Ecolab and Palfinger
Very weak diversification
The 3 months correlation between Ecolab and Palfinger is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Ecolab Inc and Palfinger AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Palfinger AG 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 Palfinger. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Palfinger AG has no effect on the direction of Ecolab i.e., Ecolab and Palfinger go up and down completely randomly.
Pair Corralation between Ecolab and Palfinger
If you would invest 2,200 in Palfinger AG on September 13, 2024 and sell it today you would earn a total of 0.00 from holding Palfinger AG or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Ecolab Inc vs. Palfinger AG
Performance |
| Timeline |
| Ecolab Inc |
| Palfinger AG |
Ecolab and Palfinger Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ecolab and Palfinger
The main advantage of trading using opposite Ecolab and Palfinger positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ecolab position performs unexpectedly, Palfinger 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 Palfinger will offset losses from the drop in Palfinger's long position.| Ecolab vs. LyondellBasell Industries NV | Ecolab vs. International Flavors Fragrances | Ecolab vs. Cabot | Ecolab vs. Westlake Chemical |
| Palfinger vs. NetEase | Palfinger vs. Asure Software | Palfinger vs. Plexus Corp | Palfinger vs. Definitive Healthcare Corp |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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