Correlation Between Empire State and Ecolab
Can any of the company-specific risk be diversified away by investing in both Empire State and Ecolab 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 Empire State and Ecolab into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Empire State Realty and Ecolab Inc, you can compare the effects of market volatilities on Empire State and Ecolab 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 Empire State with a short position of Ecolab. Check out your portfolio center. Please also check ongoing floating volatility patterns of Empire State and Ecolab.
Diversification Opportunities for Empire State and Ecolab
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Empire and Ecolab is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Empire State Realty and Ecolab Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ecolab Inc and Empire State 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 Empire State Realty are associated (or correlated) with Ecolab. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ecolab Inc has no effect on the direction of Empire State i.e., Empire State and Ecolab go up and down completely randomly.
Pair Corralation between Empire State and Ecolab
Given the investment horizon of 90 days Empire State Realty is expected to generate 0.87 times more return on investment than Ecolab. However, Empire State Realty is 1.16 times less risky than Ecolab. It trades about 0.11 of its potential returns per unit of risk. Ecolab Inc is currently generating about 0.0 per unit of risk. If you would invest 1,076 in Empire State Realty on August 30, 2024 and sell it today you would earn a total of 32.00 from holding Empire State Realty or generate 2.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Empire State Realty vs. Ecolab Inc
Performance |
| Timeline |
| Empire State Realty |
| Ecolab Inc |
Empire State and Ecolab Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Empire State and Ecolab
The main advantage of trading using opposite Empire State and Ecolab positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Empire State position performs unexpectedly, Ecolab 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 Ecolab will offset losses from the drop in Ecolab's long position.| Empire State vs. Paramount Group | Empire State vs. Hudson Pacific Properties | Empire State vs. Equity Commonwealth | Empire State vs. Douglas Emmett |
| Ecolab vs. Linde plc | Ecolab vs. Superior Plus Corp | Ecolab vs. NMI Holdings | Ecolab vs. SIVERS SEMICONDUCTORS AB |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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