Correlation Between ECN Capital and Life Banc
Can any of the company-specific risk be diversified away by investing in both ECN Capital and Life Banc 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 ECN Capital and Life Banc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ECN Capital Corp and Life Banc Split, you can compare the effects of market volatilities on ECN Capital and Life Banc 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 ECN Capital with a short position of Life Banc. Check out your portfolio center. Please also check ongoing floating volatility patterns of ECN Capital and Life Banc.
Diversification Opportunities for ECN Capital and Life Banc
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between ECN and Life is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding ECN Capital Corp and Life Banc Split in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Life Banc Split and ECN Capital 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 ECN Capital Corp are associated (or correlated) with Life Banc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Life Banc Split has no effect on the direction of ECN Capital i.e., ECN Capital and Life Banc go up and down completely randomly.
Pair Corralation between ECN Capital and Life Banc
Assuming the 90 days trading horizon ECN Capital Corp is expected to generate 5.03 times more return on investment than Life Banc. However, ECN Capital is 5.03 times more volatile than Life Banc Split. It trades about 0.21 of its potential returns per unit of risk. Life Banc Split is currently generating about 0.45 per unit of risk. If you would invest 222.00 in ECN Capital Corp on August 31, 2024 and sell it today you would earn a total of 56.00 from holding ECN Capital Corp or generate 25.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
ECN Capital Corp vs. Life Banc Split
Performance |
| Timeline |
| ECN Capital Corp |
| Life Banc Split |
ECN Capital and Life Banc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ECN Capital and Life Banc
The main advantage of trading using opposite ECN Capital and Life Banc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ECN Capital position performs unexpectedly, Life Banc 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 Life Banc will offset losses from the drop in Life Banc's long position.| ECN Capital vs. Element Fleet Management | ECN Capital vs. Colliers International Group | ECN Capital vs. Altus Group Limited | ECN Capital vs. FirstService Corp |
| Life Banc vs. Global Dividend Growth | Life Banc vs. Dividend Growth Split | Life Banc vs. Brompton Split Banc | Life Banc vs. Financial 15 Split |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
Other Complementary Tools
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |