Correlation Between Green Star and Ecovyst
Can any of the company-specific risk be diversified away by investing in both Green Star and Ecovyst 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 Green Star and Ecovyst into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Green Star Products and Ecovyst, you can compare the effects of market volatilities on Green Star and Ecovyst 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 Green Star with a short position of Ecovyst. Check out your portfolio center. Please also check ongoing floating volatility patterns of Green Star and Ecovyst.
Diversification Opportunities for Green Star and Ecovyst
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Green and Ecovyst is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Green Star Products and Ecovyst in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ecovyst and Green Star 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 Green Star Products are associated (or correlated) with Ecovyst. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ecovyst has no effect on the direction of Green Star i.e., Green Star and Ecovyst go up and down completely randomly.
Pair Corralation between Green Star and Ecovyst
Given the investment horizon of 90 days Green Star Products is expected to generate 11.43 times more return on investment than Ecovyst. However, Green Star is 11.43 times more volatile than Ecovyst. It trades about 0.06 of its potential returns per unit of risk. Ecovyst is currently generating about 0.0 per unit of risk. If you would invest 0.25 in Green Star Products on August 26, 2024 and sell it today you would lose (0.18) from holding Green Star Products or give up 72.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Green Star Products vs. Ecovyst
Performance |
| Timeline |
| Green Star Products |
| Ecovyst |
Green Star and Ecovyst Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Green Star and Ecovyst
The main advantage of trading using opposite Green Star and Ecovyst positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Green Star position performs unexpectedly, Ecovyst 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 Ecovyst will offset losses from the drop in Ecovyst's long position.| Green Star vs. First Graphene | Green Star vs. HUMANA INC | Green Star vs. Aquagold International | Green Star vs. Barloworld Ltd ADR |
| Ecovyst vs. Orion Engineered Carbons | Ecovyst vs. Cabot | Ecovyst vs. Minerals Technologies | Ecovyst vs. Quaker Chemical |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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