Correlation Between Weyco and Ecolab
Can any of the company-specific risk be diversified away by investing in both Weyco 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 Weyco and Ecolab into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Weyco Group and Ecolab Inc, you can compare the effects of market volatilities on Weyco 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 Weyco with a short position of Ecolab. Check out your portfolio center. Please also check ongoing floating volatility patterns of Weyco and Ecolab.
Diversification Opportunities for Weyco and Ecolab
Very good diversification
The 3 months correlation between Weyco and Ecolab is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Weyco Group and Ecolab Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ecolab Inc and Weyco 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 Weyco Group 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 Weyco i.e., Weyco and Ecolab go up and down completely randomly.
Pair Corralation between Weyco and Ecolab
Given the investment horizon of 90 days Weyco Group is expected to under-perform the Ecolab. In addition to that, Weyco is 3.2 times more volatile than Ecolab Inc. It trades about -0.23 of its total potential returns per unit of risk. Ecolab Inc is currently generating about -0.14 per unit of volatility. If you would invest 25,056 in Ecolab Inc on September 12, 2024 and sell it today you would lose (504.00) from holding Ecolab Inc or give up 2.01% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Weyco Group vs. Ecolab Inc
Performance |
| Timeline |
| Weyco Group |
| Ecolab Inc |
Weyco and Ecolab Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Weyco and Ecolab
The main advantage of trading using opposite Weyco and Ecolab positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Weyco 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.The idea behind Weyco Group and Ecolab Inc pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Ecolab vs. Linde plc Ordinary | Ecolab vs. PPG Industries | Ecolab vs. Sherwin Williams Co | Ecolab vs. LyondellBasell Industries NV |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
Other Complementary Tools
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges |