Correlation Between Ecofin Global and Light Science
Can any of the company-specific risk be diversified away by investing in both Ecofin Global and Light Science 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 Ecofin Global and Light Science into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ecofin Global Utilities and Light Science Technologies, you can compare the effects of market volatilities on Ecofin Global and Light Science 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 Ecofin Global with a short position of Light Science. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ecofin Global and Light Science.
Diversification Opportunities for Ecofin Global and Light Science
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ecofin and Light is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Ecofin Global Utilities and Light Science Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Light Science Techno and Ecofin Global 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 Ecofin Global Utilities are associated (or correlated) with Light Science. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Light Science Techno has no effect on the direction of Ecofin Global i.e., Ecofin Global and Light Science go up and down completely randomly.
Pair Corralation between Ecofin Global and Light Science
Assuming the 90 days trading horizon Ecofin Global Utilities is expected to generate 0.32 times more return on investment than Light Science. However, Ecofin Global Utilities is 3.09 times less risky than Light Science. It trades about 0.07 of its potential returns per unit of risk. Light Science Technologies is currently generating about -0.01 per unit of risk. If you would invest 17,217 in Ecofin Global Utilities on November 4, 2024 and sell it today you would earn a total of 1,683 from holding Ecofin Global Utilities or generate 9.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ecofin Global Utilities vs. Light Science Technologies
Performance |
| Timeline |
| Ecofin Global Utilities |
| Light Science Techno |
Ecofin Global and Light Science Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ecofin Global and Light Science
The main advantage of trading using opposite Ecofin Global and Light Science positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ecofin Global position performs unexpectedly, Light Science 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 Light Science will offset losses from the drop in Light Science's long position.| Ecofin Global vs. Quadrise Plc | Ecofin Global vs. ImmuPharma PLC | Ecofin Global vs. Intuitive Investments Group | Ecofin Global vs. European Metals Holdings |
| Light Science vs. SM Energy Co | Light Science vs. FuelCell Energy | Light Science vs. Grand Vision Media | Light Science vs. Overstock |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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