Correlation Between Ecovyst and Neo Performance
Can any of the company-specific risk be diversified away by investing in both Ecovyst and Neo Performance 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 Ecovyst and Neo Performance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ecovyst and Neo Performance Materials, you can compare the effects of market volatilities on Ecovyst and Neo Performance 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 Ecovyst with a short position of Neo Performance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ecovyst and Neo Performance.
Diversification Opportunities for Ecovyst and Neo Performance
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ecovyst and Neo is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Ecovyst and Neo Performance Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neo Performance Materials and Ecovyst 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 Ecovyst are associated (or correlated) with Neo Performance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neo Performance Materials has no effect on the direction of Ecovyst i.e., Ecovyst and Neo Performance go up and down completely randomly.
Pair Corralation between Ecovyst and Neo Performance
Given the investment horizon of 90 days Ecovyst is expected to generate 1.62 times more return on investment than Neo Performance. However, Ecovyst is 1.62 times more volatile than Neo Performance Materials. It trades about 0.11 of its potential returns per unit of risk. Neo Performance Materials is currently generating about -0.07 per unit of risk. If you would invest 690.00 in Ecovyst on August 25, 2024 and sell it today you would earn a total of 129.00 from holding Ecovyst or generate 18.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.46% |
| Values | Daily Returns |
Ecovyst vs. Neo Performance Materials
Performance |
| Timeline |
| Ecovyst |
| Neo Performance Materials |
Ecovyst and Neo Performance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ecovyst and Neo Performance
The main advantage of trading using opposite Ecovyst and Neo Performance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ecovyst position performs unexpectedly, Neo Performance 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 Neo Performance will offset losses from the drop in Neo Performance's long position.| Ecovyst vs. Orion Engineered Carbons | Ecovyst vs. Cabot | Ecovyst vs. Minerals Technologies | Ecovyst vs. Quaker Chemical |
| Neo Performance vs. Mativ Holdings | Neo Performance vs. Sensient Technologies | Neo Performance vs. Koppers Holdings | Neo Performance vs. Axalta Coating Systems |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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