Correlation Between Ecolab and BATSLN
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By analyzing existing cross correlation between Ecolab Inc and BATSLN 475 01 NOV 42, you can compare the effects of market volatilities on Ecolab and BATSLN 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 BATSLN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ecolab and BATSLN.
Diversification Opportunities for Ecolab and BATSLN
Modest diversification
The 3 months correlation between Ecolab and BATSLN is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Ecolab Inc and BATSLN 475 01 NOV 42 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BATSLN 475 01 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 BATSLN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BATSLN 475 01 has no effect on the direction of Ecolab i.e., Ecolab and BATSLN go up and down completely randomly.
Pair Corralation between Ecolab and BATSLN
Considering the 90-day investment horizon Ecolab Inc is expected to generate 0.37 times more return on investment than BATSLN. However, Ecolab Inc is 2.72 times less risky than BATSLN. It trades about 0.09 of its potential returns per unit of risk. BATSLN 475 01 NOV 42 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 Together |
| Strength | Very Weak |
| Accuracy | 38.91% |
| Values | Daily Returns |
Ecolab Inc vs. BATSLN 475 01 NOV 42
Performance |
| Timeline |
| Ecolab Inc |
| BATSLN 475 01 |
Ecolab and BATSLN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ecolab and BATSLN
The main advantage of trading using opposite Ecolab and BATSLN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ecolab position performs unexpectedly, BATSLN 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 BATSLN will offset losses from the drop in BATSLN'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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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