Correlation Between Encore Capital and CleanCore Solutions
Can any of the company-specific risk be diversified away by investing in both Encore Capital and CleanCore Solutions 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 Encore Capital and CleanCore Solutions into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Encore Capital Group and CleanCore Solutions, you can compare the effects of market volatilities on Encore Capital and CleanCore Solutions 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 Encore Capital with a short position of CleanCore Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Encore Capital and CleanCore Solutions.
Diversification Opportunities for Encore Capital and CleanCore Solutions
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Encore and CleanCore is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Encore Capital Group and CleanCore Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CleanCore Solutions and Encore 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 Encore Capital Group are associated (or correlated) with CleanCore Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CleanCore Solutions has no effect on the direction of Encore Capital i.e., Encore Capital and CleanCore Solutions go up and down completely randomly.
Pair Corralation between Encore Capital and CleanCore Solutions
Given the investment horizon of 90 days Encore Capital Group is expected to generate 0.23 times more return on investment than CleanCore Solutions. However, Encore Capital Group is 4.34 times less risky than CleanCore Solutions. It trades about 0.06 of its potential returns per unit of risk. CleanCore Solutions is currently generating about 0.01 per unit of risk. If you would invest 4,587 in Encore Capital Group on September 12, 2024 and sell it today you would earn a total of 294.00 from holding Encore Capital Group or generate 6.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Encore Capital Group vs. CleanCore Solutions
Performance |
| Timeline |
| Encore Capital Group |
| CleanCore Solutions |
Encore Capital and CleanCore Solutions Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Encore Capital and CleanCore Solutions
The main advantage of trading using opposite Encore Capital and CleanCore Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Encore Capital position performs unexpectedly, CleanCore Solutions 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 CleanCore Solutions will offset losses from the drop in CleanCore Solutions' long position.| Encore Capital vs. Guild Holdings Co | Encore Capital vs. Mr Cooper Group | Encore Capital vs. CNFinance Holdings | Encore Capital vs. Security National Financial |
| CleanCore Solutions vs. Energy Recovery | CleanCore Solutions vs. Arq Inc | CleanCore Solutions vs. Federal Signal | CleanCore Solutions vs. Purecycle Technologies Holdings |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
Other Complementary Tools
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments |