Correlation Between SECURE ELECTRONIC and ECOBANK TRANSNATIONAL

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

By analyzing existing cross correlation between SECURE ELECTRONIC TECHNOLOGY and ECOBANK TRANSNATIONAL INCORPORATED, you can compare the effects of market volatilities on SECURE ELECTRONIC and ECOBANK TRANSNATIONAL 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 SECURE ELECTRONIC with a short position of ECOBANK TRANSNATIONAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of SECURE ELECTRONIC and ECOBANK TRANSNATIONAL.

Diversification Opportunities for SECURE ELECTRONIC and ECOBANK TRANSNATIONAL

-0.28

Correlation Coefficient

SECURE ELECTRONIC  ECOBANK TRANSNATIONAL

Very good diversification

The 3 months correlation between SECURE and ECOBANK is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding SECURE ELECTRONIC TECHNOLOGY and ECOBANK TRANSNATIONAL INCORPOR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ECOBANK TRANSNATIONAL and SECURE ELECTRONIC 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 SECURE ELECTRONIC TECHNOLOGY are associated (or correlated) with ECOBANK TRANSNATIONAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ECOBANK TRANSNATIONAL has no effect on the direction of SECURE ELECTRONIC i.e., SECURE ELECTRONIC and ECOBANK TRANSNATIONAL go up and down completely randomly.

Pair Corralation between SECURE ELECTRONIC and ECOBANK TRANSNATIONAL

Assuming the 90 days trading horizon SECURE ELECTRONIC TECHNOLOGY is expected to under-perform the ECOBANK TRANSNATIONAL. In addition to that, SECURE ELECTRONIC is 3.1 times more volatile than ECOBANK TRANSNATIONAL INCORPORATED. It trades about -0.04 of its total potential returns per unit of risk. ECOBANK TRANSNATIONAL INCORPORATED is currently generating about 0.18 per unit of volatility. If you would invest  2,160  in ECOBANK TRANSNATIONAL INCORPORATED on September 12, 2024 and sell it today you would earn a total of  390.00  from holding ECOBANK TRANSNATIONAL INCORPORATED or generate 18.06% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

SECURE ELECTRONIC TECHNOLOGY  vs.  ECOBANK TRANSNATIONAL INCORPOR

SECURE ELECTRONIC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SECURE ELECTRONIC TECHNOLOGY has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's fundamental indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

ECOBANK TRANSNATIONAL

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ECOBANK TRANSNATIONAL INCORPORATED are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, ECOBANK TRANSNATIONAL unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SECURE ELECTRONIC and ECOBANK TRANSNATIONAL

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

The idea behind SECURE ELECTRONIC TECHNOLOGY and ECOBANK TRANSNATIONAL INCORPORATED 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.