Correlation Between Ecolab and PV Nano

Can any of the company-specific risk be diversified away by investing in both Ecolab and PV Nano 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 Ecolab and PV Nano into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ecolab Inc and PV Nano Cell, you can compare the effects of market volatilities on Ecolab and PV Nano 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 Ecolab with a short position of PV Nano. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ecolab and PV Nano.

Diversification Opportunities for Ecolab and PV Nano

-0.63

Correlation Coefficient

Ecolab  PV Nano

Excellent diversification

The 3 months correlation between Ecolab and PVNNF is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Ecolab Inc and PV Nano Cell in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PV Nano Cell and Ecolab 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 Ecolab Inc are associated (or correlated) with PV Nano. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PV Nano Cell has no effect on the direction of Ecolab i.e., Ecolab and PV Nano go up and down completely randomly.

Pair Corralation between Ecolab and PV Nano

If you would invest  24,450  in Ecolab Inc on September 5, 2024 and sell it today you would earn a total of  367.00  from holding Ecolab Inc or generate 1.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	95.45%
Values	Daily Returns

Ecolab Inc  vs.  PV Nano Cell

Ecolab Inc

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Ecolab Inc are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent fundamental indicators, Ecolab is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

PV Nano Cell

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in PV Nano Cell are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, PV Nano may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Ecolab and PV Nano

The main advantage of trading using opposite Ecolab and PV Nano positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ecolab position performs unexpectedly, PV Nano 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 PV Nano will offset losses from the drop in PV Nano's long position.

The idea behind Ecolab Inc and PV Nano Cell 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.

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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.