Correlation Between Ecovyst and AMERICAN
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By analyzing existing cross correlation between Ecovyst and AMERICAN INTERNATIONAL GROUP, you can compare the effects of market volatilities on Ecovyst and AMERICAN 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 AMERICAN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ecovyst and AMERICAN.
Diversification Opportunities for Ecovyst and AMERICAN
Excellent diversification
The 3 months correlation between Ecovyst and AMERICAN is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Ecovyst and AMERICAN INTERNATIONAL GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMERICAN INTERNATIONAL 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 AMERICAN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMERICAN INTERNATIONAL has no effect on the direction of Ecovyst i.e., Ecovyst and AMERICAN go up and down completely randomly.
Pair Corralation between Ecovyst and AMERICAN
Given the investment horizon of 90 days Ecovyst is expected to generate 1276.3 times less return on investment than AMERICAN. But when comparing it to its historical volatility, Ecovyst is 35.39 times less risky than AMERICAN. It trades about 0.0 of its potential returns per unit of risk. AMERICAN INTERNATIONAL GROUP is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 9,035 in AMERICAN INTERNATIONAL GROUP on September 3, 2024 and sell it today you would lose (301.00) from holding AMERICAN INTERNATIONAL GROUP or give up 3.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 85.45% |
| Values | Daily Returns |
Ecovyst vs. AMERICAN INTERNATIONAL GROUP
Performance |
| Timeline |
| Ecovyst |
| AMERICAN INTERNATIONAL |
Ecovyst and AMERICAN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ecovyst and AMERICAN
The main advantage of trading using opposite Ecovyst and AMERICAN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ecovyst position performs unexpectedly, AMERICAN 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 AMERICAN will offset losses from the drop in AMERICAN's long position.The idea behind Ecovyst and AMERICAN INTERNATIONAL GROUP pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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