Correlation Between Ecolab and GENERAL
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By analyzing existing cross correlation between Ecolab Inc and GENERAL ELEC CAP, you can compare the effects of market volatilities on Ecolab and GENERAL 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 GENERAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ecolab and GENERAL.
Diversification Opportunities for Ecolab and GENERAL
Very good diversification
The 3 months correlation between Ecolab and GENERAL is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Ecolab Inc and GENERAL ELEC CAP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GENERAL ELEC CAP 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 GENERAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GENERAL ELEC CAP has no effect on the direction of Ecolab i.e., Ecolab and GENERAL go up and down completely randomly.
Pair Corralation between Ecolab and GENERAL
Considering the 90-day investment horizon Ecolab Inc is expected to generate 0.47 times more return on investment than GENERAL. However, Ecolab Inc is 2.12 times less risky than GENERAL. It trades about 0.09 of its potential returns per unit of risk. GENERAL ELEC CAP is currently generating about -0.03 per unit of risk. If you would invest 19,544 in Ecolab Inc on September 14, 2024 and sell it today you would earn a total of 5,346 from holding Ecolab Inc or generate 27.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 23.69% |
| Values | Daily Returns |
Ecolab Inc vs. GENERAL ELEC CAP
Performance |
| Timeline |
| Ecolab Inc |
| GENERAL ELEC CAP |
Ecolab and GENERAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ecolab and GENERAL
The main advantage of trading using opposite Ecolab and GENERAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ecolab position performs unexpectedly, GENERAL 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 GENERAL will offset losses from the drop in GENERAL's long position.| Ecolab vs. LyondellBasell Industries NV | Ecolab vs. Cabot | Ecolab vs. Westlake Chemical | Ecolab vs. Air Products and |
| GENERAL vs. American Airlines Group | GENERAL vs. The Mosaic | GENERAL vs. Ecolab Inc | GENERAL vs. Sun Country Airlines |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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