Correlation Between Ecolab and Signature Bank
Can any of the company-specific risk be diversified away by investing in both Ecolab and Signature Bank 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 Signature Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ecolab Inc and Signature Bank, you can compare the effects of market volatilities on Ecolab and Signature Bank 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 Signature Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ecolab and Signature Bank.
Diversification Opportunities for Ecolab and Signature Bank
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ecolab and Signature is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Ecolab Inc and Signature Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Signature Bank 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 Signature Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Signature Bank has no effect on the direction of Ecolab i.e., Ecolab and Signature Bank go up and down completely randomly.
Pair Corralation between Ecolab and Signature Bank
If you would invest 24,573 in Ecolab Inc on September 1, 2024 and sell it today you would earn a total of 304.00 from holding Ecolab Inc or generate 1.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Ecolab Inc vs. Signature Bank
Performance |
| Timeline |
| Ecolab Inc |
| Signature Bank |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Ecolab and Signature Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ecolab and Signature Bank
The main advantage of trading using opposite Ecolab and Signature Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ecolab position performs unexpectedly, Signature Bank 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 Signature Bank will offset losses from the drop in Signature Bank's long position.| Ecolab vs. Linde plc Ordinary | Ecolab vs. Air Products and | Ecolab vs. Aquagold International | Ecolab vs. Thrivent High Yield |
| Signature Bank vs. Primoris Services | Signature Bank vs. BOS Better Online | Signature Bank vs. Integral Ad Science | Signature Bank vs. Emerson Electric |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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