Correlation Between Turning Point and Ecovyst
Can any of the company-specific risk be diversified away by investing in both Turning Point 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 Turning Point and Ecovyst into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Turning Point Brands and Ecovyst, you can compare the effects of market volatilities on Turning Point 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 Turning Point with a short position of Ecovyst. Check out your portfolio center. Please also check ongoing floating volatility patterns of Turning Point and Ecovyst.
Diversification Opportunities for Turning Point and Ecovyst
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Turning and Ecovyst is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Turning Point Brands and Ecovyst in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ecovyst and Turning Point 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 Turning Point Brands 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 Turning Point i.e., Turning Point and Ecovyst go up and down completely randomly.
Pair Corralation between Turning Point and Ecovyst
Considering the 90-day investment horizon Turning Point Brands is expected to generate 0.97 times more return on investment than Ecovyst. However, Turning Point Brands is 1.03 times less risky than Ecovyst. It trades about 0.42 of its potential returns per unit of risk. Ecovyst is currently generating about -0.07 per unit of risk. If you would invest 5,250 in Turning Point Brands on September 12, 2024 and sell it today you would earn a total of 1,138 from holding Turning Point Brands or generate 21.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Turning Point Brands vs. Ecovyst
Performance |
| Timeline |
| Turning Point Brands |
| Ecovyst |
Turning Point and Ecovyst Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Turning Point and Ecovyst
The main advantage of trading using opposite Turning Point and Ecovyst positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Turning Point 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.| Turning Point vs. Universal | Turning Point vs. Imperial Brands PLC | Turning Point vs. British American Tobacco | Turning Point vs. Philip Morris International |
| 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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