Correlation Between Ecolab and UNION
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By analyzing existing cross correlation between Ecolab Inc and UNION ELEC 4, you can compare the effects of market volatilities on Ecolab and UNION 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 UNION. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ecolab and UNION.
Diversification Opportunities for Ecolab and UNION
Weak diversification
The 3 months correlation between Ecolab and UNION is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Ecolab Inc and UNION ELEC 4 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UNION ELEC 4 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 UNION. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UNION ELEC 4 has no effect on the direction of Ecolab i.e., Ecolab and UNION go up and down completely randomly.
Pair Corralation between Ecolab and UNION
Considering the 90-day investment horizon Ecolab Inc is expected to generate 0.51 times more return on investment than UNION. However, Ecolab Inc is 1.96 times less risky than UNION. It trades about 0.12 of its potential returns per unit of risk. UNION ELEC 4 is currently generating about -0.08 per unit of risk. If you would invest 24,450 in Ecolab Inc on September 3, 2024 and sell it today you would earn a total of 427.00 from holding Ecolab Inc or generate 1.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 45.0% |
| Values | Daily Returns |
Ecolab Inc vs. UNION ELEC 4
Performance |
| Timeline |
| Ecolab Inc |
| UNION ELEC 4 |
Ecolab and UNION Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ecolab and UNION
The main advantage of trading using opposite Ecolab and UNION positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ecolab position performs unexpectedly, UNION 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 UNION will offset losses from the drop in UNION's long position.| Ecolab vs. Linde plc Ordinary | Ecolab vs. PPG Industries | Ecolab vs. Sherwin Williams Co | Ecolab vs. LyondellBasell Industries NV |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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