Correlation Between Maanshan Iron and ECOLAB
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By analyzing existing cross correlation between Maanshan Iron Steel and ECOLAB INC 325, you can compare the effects of market volatilities on Maanshan Iron 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 Maanshan Iron with a short position of ECOLAB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maanshan Iron and ECOLAB.
Diversification Opportunities for Maanshan Iron and ECOLAB
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Maanshan and ECOLAB is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Maanshan Iron Steel and ECOLAB INC 325 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ECOLAB INC 325 and Maanshan Iron 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 Maanshan Iron Steel 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 325 has no effect on the direction of Maanshan Iron i.e., Maanshan Iron and ECOLAB go up and down completely randomly.
Pair Corralation between Maanshan Iron and ECOLAB
Assuming the 90 days horizon Maanshan Iron Steel is expected to under-perform the ECOLAB. In addition to that, Maanshan Iron is 15.81 times more volatile than ECOLAB INC 325. It trades about -0.22 of its total potential returns per unit of risk. ECOLAB INC 325 is currently generating about -0.16 per unit of volatility. If you would invest 9,643 in ECOLAB INC 325 on September 3, 2024 and sell it today you would lose (85.00) from holding ECOLAB INC 325 or give up 0.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Maanshan Iron Steel vs. ECOLAB INC 325
Performance |
| Timeline |
| Maanshan Iron Steel |
| ECOLAB INC 325 |
Maanshan Iron and ECOLAB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Maanshan Iron and ECOLAB
The main advantage of trading using opposite Maanshan Iron and ECOLAB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Maanshan Iron 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.| Maanshan Iron vs. Ta Chen Stainless | Maanshan Iron vs. Gerdau SA | Maanshan Iron vs. Gerdau SA | Maanshan Iron vs. Nucor Corp |
| ECOLAB vs. Glacier Bancorp | ECOLAB vs. AmTrust Financial Services | ECOLAB vs. Fomento Economico Mexicano | ECOLAB vs. Suntory Beverage Food |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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