Correlation Between Healthequity and Ecolab

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Can any of the company-specific risk be diversified away by investing in both Healthequity 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 Healthequity and Ecolab into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Healthequity and Ecolab Inc, you can compare the effects of market volatilities on Healthequity 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 Healthequity with a short position of Ecolab. Check out your portfolio center. Please also check ongoing floating volatility patterns of Healthequity and Ecolab.

Diversification Opportunities for Healthequity and Ecolab

-0.22
  Correlation Coefficient

Very good diversification

The 3 months correlation between Healthequity and Ecolab is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Healthequity and Ecolab Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ecolab Inc and Healthequity 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 Healthequity 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 Healthequity i.e., Healthequity and Ecolab go up and down completely randomly.

Pair Corralation between Healthequity and Ecolab

Considering the 90-day investment horizon Healthequity is expected to generate 1.69 times more return on investment than Ecolab. However, Healthequity is 1.69 times more volatile than Ecolab Inc. It trades about 0.03 of its potential returns per unit of risk. Ecolab Inc is currently generating about -0.03 per unit of risk. If you would invest  5,454  in Healthequity on June 29, 2022 and sell it today you would earn a total of  1,646  from holding Healthequity or generate 30.18% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Healthequity  vs.  Ecolab Inc

 Performance (%) 
       Timeline  
Healthequity 
Healthequity Performance
6 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Healthequity are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Healthequity showed solid returns over the last few months and may actually be approaching a breakup point.

Healthequity Price Channel

Ecolab Inc 
Ecolab Performance
0 of 100
Over the last 90 days Ecolab Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively steady fundamental indicators, Ecolab is not utilizing all of its potentials. The latest stock price chaos, may contribute to medium-term losses for the stakeholders.

Ecolab Price Channel

Healthequity and Ecolab Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Healthequity and Ecolab

The main advantage of trading using opposite Healthequity and Ecolab positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Healthequity 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.
Healthequity vs. Clearwater Paper Corp
The idea behind Healthequity 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. Kibush Capital Corp
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 Fund Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.

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