Correlation Between Ecolab and AMAZON
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By analyzing existing cross correlation between Ecolab Inc and AMAZON INC 52, you can compare the effects of market volatilities on Ecolab and AMAZON 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 AMAZON. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ecolab and AMAZON.
Diversification Opportunities for Ecolab and AMAZON
Good diversification
The 3 months correlation between Ecolab and AMAZON is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Ecolab Inc and AMAZON INC 52 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMAZON INC 52 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 AMAZON. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMAZON INC 52 has no effect on the direction of Ecolab i.e., Ecolab and AMAZON go up and down completely randomly.
Pair Corralation between Ecolab and AMAZON
Considering the 90-day investment horizon Ecolab Inc is expected to generate 4.72 times more return on investment than AMAZON. However, Ecolab is 4.72 times more volatile than AMAZON INC 52. It trades about 0.09 of its potential returns per unit of risk. AMAZON INC 52 is currently generating about -0.01 per unit of risk. If you would invest 14,708 in Ecolab Inc on September 2, 2024 and sell it today you would earn a total of 10,169 from holding Ecolab Inc or generate 69.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Ecolab Inc vs. AMAZON INC 52
Performance |
| Timeline |
| Ecolab Inc |
| AMAZON INC 52 |
Ecolab and AMAZON Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ecolab and AMAZON
The main advantage of trading using opposite Ecolab and AMAZON positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ecolab position performs unexpectedly, AMAZON 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 AMAZON will offset losses from the drop in AMAZON's long position.| Ecolab vs. Linde plc Ordinary | Ecolab vs. Air Products and | Ecolab vs. Aquagold International | Ecolab vs. Thrivent High Yield |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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