Correlation Between Ecolab and 360 Finance
Can any of the company-specific risk be diversified away by investing in both Ecolab and 360 Finance 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 360 Finance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ecolab Inc and 360 Finance, you can compare the effects of market volatilities on Ecolab and 360 Finance 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 360 Finance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ecolab and 360 Finance.
Diversification Opportunities for Ecolab and 360 Finance
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ecolab and 360 is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Ecolab Inc and 360 Finance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 360 Finance 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 360 Finance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 360 Finance has no effect on the direction of Ecolab i.e., Ecolab and 360 Finance go up and down completely randomly.
Pair Corralation between Ecolab and 360 Finance
Considering the 90-day investment horizon Ecolab Inc is expected to under-perform the 360 Finance. But the stock apears to be less risky and, when comparing its historical volatility, Ecolab Inc is 5.23 times less risky than 360 Finance. The stock trades about -0.03 of its potential returns per unit of risk. The 360 Finance is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 3,036 in 360 Finance on September 14, 2024 and sell it today you would earn a total of 723.00 from holding 360 Finance or generate 23.81% 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. 360 Finance
Performance |
| Timeline |
| Ecolab Inc |
| 360 Finance |
Ecolab and 360 Finance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ecolab and 360 Finance
The main advantage of trading using opposite Ecolab and 360 Finance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ecolab position performs unexpectedly, 360 Finance 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 360 Finance will offset losses from the drop in 360 Finance's long position.| Ecolab vs. LyondellBasell Industries NV | Ecolab vs. International Flavors Fragrances | Ecolab vs. Cabot | Ecolab vs. Westlake Chemical |
| 360 Finance vs. NETGEAR | 360 Finance vs. Analog Devices | 360 Finance vs. Jutal Offshore Oil | 360 Finance vs. Asure Software |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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