Ecolab Stock Volatility

ECL
 Stock
  

USD 149.83  4.92  3.40%   

Ecolab Inc secures Sharpe Ratio (or Efficiency) of -0.0298, which denotes the company had -0.0298% of return per unit of risk over the last 3 months. Macroaxis standpoint towards predicting the risk of any stock is to look at both systematic and unsystematic factors of the business, including all available market data and technical indicators. Ecolab Inc exposes twenty-eight different technical indicators, which can help you to evaluate volatility that cannot be diversified away. Please be advised to confirm Ecolab Inc coefficient of variation of (2,475), and Mean Deviation of 2.01 to check the risk estimate we provide.
  
Ecolab Stock volatility depicts how high the prices fluctuate around the mean (or its average) price. In other words, it is a statistical measure of the distribution of Ecolab daily returns, and it is calculated using variance and standard deviation. We also use Ecolab's beta, its sensitivity to the market, as well as its odds of financial distress to provide a more practical estimation of Ecolab volatility.

30 Days Market Risk

Very steady

Chance of Distress

30 Days Economic Sensitivity

Responds to the market

ESG Sustainability

While most ESG disclosures are voluntary, Ecolab's sustainability indicators can be used to identify proper investment strategies using environmental, social, and governance scores that are crucial to Ecolab's managers and investors.
Environment Score
Governance Score
Social Score
Since volatility provides investors with entry points to take advantage of stock prices, companies, such as Ecolab can benefit from it. Downward market volatility can be a perfect environment for investors who play the long game. Here, they may decide to buy additional stocks of Ecolab at lower prices. For example, an investor can purchase Ecolab stock that has halved in price over a short period. This will lower your average cost per share, thereby improving your portfolio's performance when the markets normalize. Similarly, when the prices of Ecolab's stock rises, investors can sell out and invest the proceeds in other equities with better opportunities. Investing when markets are volatile with better valuations will accord both investors and companies the opportunity to generate better long-term returns.

Moving together with Ecolab

+0.7GEVOGevo Inc Normal TradingPairCorr
+0.67GUREGulf ResourcesPairCorr

Ecolab Market Sensitivity And Downside Risk

Ecolab's beta coefficient measures the volatility of Ecolab stock compared to the systematic risk of the entire stock market represented by your selected benchmark. In mathematical terms, beta represents the slope of the line through a regression of data points where each of these points represents Ecolab stock's returns against your selected market. In other words, Ecolab's beta of 1.38 provides an investor with an approximation of how much risk Ecolab stock can potentially add to one of your existing portfolios.
Ecolab Inc exhibits very low volatility with skewness of -0.09 and kurtosis of 1.63. However, we advise investors to further study Ecolab Inc technical indicators to ensure that all market info is available and is reliable. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure Ecolab's stock risk against market volatility during both bullish and bearish trends. The higher level of volatility that comes with bear markets can directly impact Ecolab's stock price while adding stress to investors as they watch their shares' value plummet. This usually forces investors to rebalance their portfolios by buying different stocks as prices fall.
3 Months Beta |Analyze Ecolab Inc Demand Trend
Check current 90 days Ecolab correlation with market (NYSE Composite)

Ecolab Beta

    
  1.38  
Ecolab standard deviation measures the daily dispersion of prices over your selected time horizon relative to its mean. Typical volatile equity has a high standard deviation, while the deviation of a stable instrument is usually low. As a downside, the standard deviation calculates all uncertainty as risk, even when it is in your favor, such as above-average returns.

Standard Deviation

    
  2.71  
It is essential to understand the difference between upside risk (as represented by Ecolab's standard deviation) and the downside risk, which can be measured by semi-deviation or downside deviation of Ecolab's daily returns or price. Since the actual investment returns on holding a position in ecolab stock tend to have a non-normal distribution, there will be different probabilities for losses than for gains. The likelihood of losses is reflected in the downside risk of an investment in Ecolab.

Using Ecolab Put Option to Manage Risk

Put options written on Ecolab grant holders of the option the right to sell a specified amount of Ecolab at a specified price within a specified time frame. The put buyer has a limited loss and, while not fully unlimited gains, as the price of Ecolab Stock cannot fall below zero, the put buyer does gain as the price drops. So, one way investors can hedge Ecolab's position is by buying a put option against it. The put option used this way is usually referred to as insurance. If an undesired outcome occurs and loss on holding Ecolab will be realized, the loss incurred will be offset by the profits made with the option trade.

Ecolab's PUT expiring on 2022-12-16

   Profit   
Share
       Ecolab Price At Expiration  

Current Ecolab Insurance Chain

DeltaGammaOpen IntExpirationCurrent SpreadLast Price
Put
2022-12-16 PUT at $175.0-0.8380.011212022-12-1623.0 - 26.821.4View
Put
2022-12-16 PUT at $165.0-0.92740.014452022-12-1613.9 - 16.922.4View
Put
2022-12-16 PUT at $160.0-0.8520.0256752022-12-169.8 - 11.712.41View
Put
2022-12-16 PUT at $155.0-0.69460.03811702022-12-165.8 - 7.88.0View
Put
2022-12-16 PUT at $150.0-0.48980.04331372022-12-163.4 - 4.43.7View
Put
2022-12-16 PUT at $145.0-0.31580.03121582022-12-161.75 - 2.62.43View
Put
2022-12-16 PUT at $140.0-0.17880.0223802022-12-160.85 - 1.52.0View
Put
2022-12-16 PUT at $135.0-0.09280.01351442022-12-160.4 - 1.050.55View
Put
2022-12-16 PUT at $130.0-0.17130.01031282022-12-160.1 - 4.80.51View
View All Ecolab Options

Ecolab Inc Stock Volatility Analysis

Volatility refers to the frequency at which Ecolab stock price increases or decreases within a specified period. These fluctuations usually indicate the level of risk that's associated with Ecolab's price changes. Investors will then calculate the volatility of Ecolab's stock to predict their future moves. A stock that has erratic price changes quickly hits new highs, and lows are considered highly volatile. A stock with relatively stable price changes has low volatility. A highly volatile stock is riskier, but the risk cuts both ways. Investing in highly volatile security can either be highly successful, or you may experience significant failure. There are two main types of Ecolab's volatility:

Historical Volatility

This type of stock volatility measures Ecolab's fluctuations based on previous trends. It's commonly used to predict Ecolab's future behavior based on its past. However, it cannot conclusively determine the future direction of the stock.

Implied Volatility

This type of volatility provides a positive outlook on future price fluctuations for Ecolab's current market price. This means that the stock will return to its initially predicted market price. This type of volatility can be derived from derivative instruments written on Ecolab's to be redeemed at a future date.
Transformation
The output start index for this execution was zero with a total number of output elements of sixty-one. Ecolab Inc Average Price is the average of the sum of open, high, low and close daily prices of a bar. It can be used to smooth an indicator that normally takes just the closing price as input.
.

Ecolab Projected Return Density Against Market

Considering the 90-day investment horizon the stock has the beta coefficient of 1.3791 suggesting as the benchmark fluctuates upward, the company is expected to outperform it on average. However, if the benchmark returns are projected to be negative, Ecolab will likely underperform.
Most traded equities are subject to two types of risk - systematic (i.e., market) and unsystematic (i.e., nonmarket or company-specific) risk. Unsystematic risk is the risk that events specific to Ecolab or Chemicals sector will adversely affect the stock's price. This type of risk can be diversified away by owning several different stocks in different industries whose stock prices have shown a small correlation to each other. On the other hand, systematic risk is the risk that Ecolab's price will be affected by overall stock market movements and cannot be diversified away. So, no matter how many positions you have, you cannot eliminate market risk. However, you can measure a Ecolab stock's historical response to market movements and buy it if you are comfortable with its volatility direction. Beta and standard deviation are two commonly used measures to help you make the right decision.
The company has a negative alpha, implying that the risk taken by holding this instrument is not justified. Ecolab Inc is significantly underperforming NYSE Composite.
   Predicted Return Density   
       Returns  
Ecolab's volatility is measured either by using standard deviation or beta. Standard deviation will reflect the average amount of how ecolab stock's price will differ from the mean after some time.To get its calculation, you should first determine the mean price during the specified period then subtract that from each price point.

What Drives an Ecolab Price Volatility?

Several factors can influence a Stock's stock volatility:

Industry

Specific events can influence volatility within a particular industry. For instance, a significant weather upheaval in a crucial oil-production site may cause oil prices to increase in the oil sector. The direct result will be the rise in the stock price of oil distribution companies. Similarly, any government regulation in a specific industry could negatively influence stock prices due to increased regulations on compliance that may impact the company's future earnings and growth.

Political and Economic environment

When governments make significant decisions regarding trade agreements, policies, and legislation regarding specific industries, they will influence stock prices. Everything from speeches to elections may influence investors, who can directly influence the stock prices in any particular industry. The prevailing economic situation also plays a significant role in stock prices. When the economy is doing well, investors will have a positive reaction and hence, better stock prices and vice versa.

The Company's Performance

Sometimes volatility will only affect an individual company. For example, a revolutionary product launch or strong earnings report may attract many investors to purchase the company. This positive attention will raise the company's stock price. In contrast, product recalls and data breaches may negatively influence a company's stock prices.

Ecolab Stock Risk Measures

Most traded equities are subject to two types of risk - systematic (i.e., market) and unsystematic (i.e., nonmarket or company-specific) risk. Unsystematic risk is the risk that events specific to Ecolab or Chemicals sector will adversely affect the stock's price. This type of risk can be diversified away by owning several different stocks in different industries whose stock prices have shown a small correlation to each other. On the other hand, systematic risk is the risk that Ecolab's price will be affected by overall stock market movements and cannot be diversified away. So, no matter how many positions you have, you cannot eliminate market risk. However, you can measure a Ecolab stock's historical response to market movements and buy it if you are comfortable with its volatility direction. Beta and standard deviation are two commonly used measures to help you make the right decision. Considering the 90-day investment horizon the coefficient of variation of Ecolab is -3354.71. The daily returns are distributed with a variance of 7.35 and standard deviation of 2.71. The mean deviation of Ecolab Inc is currently at 2.1. For similar time horizon, the selected benchmark (NYSE Composite) has volatility of 1.49
α
Alpha over NYSE Composite
-0.21
β
Beta against NYSE Composite1.38
σ
Overall volatility
2.71
Ir
Information ratio -0.07

Ecolab Stock Return Volatility

Ecolab historical daily return volatility represents how much of Ecolab stock's daily returns swing around its mean - it is a statistical measure of its dispersion of returns. The company has volatility of 2.7108% on return distribution over 90 days investment horizon. By contrast, NYSE Composite accepts 1.5194% volatility on return distribution over the 90 days horizon.
 Performance (%) 
       Timeline  

About Ecolab Volatility

Volatility is a rate at which the price of Ecolab or any other equity instrument increases or decreases for a given set of returns. It is measured by calculating the standard deviation of the annualized returns over a given period of time and shows the range to which the price of Ecolab may increase or decrease. In other words, similar to Ecolab's beta indicator, it measures the risk of Ecolab and helps estimate the fluctuations that may happen in a short period of time. So if prices of Ecolab fluctuate rapidly in a short time span, it is termed to have high volatility, and if it swings slowly in a more extended period, it is understood to have low volatility.
Please read more on our technical analysis page.
Last ReportedProjected for 2022
Market Capitalization67.2 B58.1 B

Ecolab Investment Opportunity

Ecolab Inc has a volatility of 2.71 and is 1.78 times more volatile than NYSE Composite. 23  of all equities and portfolios are less risky than Ecolab. Compared to the overall equity markets, volatility of historical daily returns of Ecolab Inc is lower than 23 () of all global equities and portfolios over the last 90 days. Use Ecolab Inc to enhance the returns of your portfolios. Benchmarks are essential to demonstrate the utility of optimization algorithms. The stock experiences an unexpected upward trend. Watch out for market signals. Check odds of Ecolab to be traded at $179.8 in 90 days.

Poor diversification

The correlation between Ecolab Inc and NYA is 0.78 (i.e., Poor diversification) for selected investment horizon. Overlapping area represents the amount of risk that can be diversified away by holding Ecolab Inc and NYA in the same portfolio, assuming nothing else is changed.

Ecolab Additional Risk Indicators

The analysis of Ecolab's secondary risk indicators is one of the essential steps in making a buy or sell decision. The process involves identifying the amount of risk involved in Ecolab's investment and either accepting that risk or mitigating it. Along with some common measures of Ecolab stock's risk such as standard deviation, beta, or value at risk, we also provide a set of secondary indicators that can assist in the individual investment decision or help in hedging the risk of your existing portfolios.
Please note, the risk measures we provide can be used independently or collectively to perform a risk assessment. When comparing two potential stocks, we recommend comparing similar stocks with homogenous growth potential and valuation from related markets to determine which investment holds the most risk.

Ecolab Suggested Diversification Pairs

Pair trading is one of the very effective strategies used by professional day traders and hedge funds capitalizing on short-time and mid-term market inefficiencies. The approach is based on the fact that the ratio of prices of two correlating shares is long-term stable and oscillates around the average value. If the correlation ratio comes outside the common area, you can speculate with a high success rate that the ratio will return to the mean value and collect a profit.
The effect of pair diversification on risk is to reduce it, but we should note this doesn't apply to all risk types. When we trade pairs against Ecolab as a counterpart, there is always some inherent risk that will never be diversified away no matter what. This volatility limits the effect of tactical diversification using pair trading. Ecolab's systematic risk is the inherent uncertainty of the entire market, and therefore cannot be mitigated even by pair-trading it against the equity that is not highly correlated to it. On the other hand, Ecolab's unsystematic risk describes the types of risk that we can protect against, at least to some degree, by selecting a matching pair that is not perfectly correlated to Ecolab Inc.
Continue to Investing Opportunities. Note that the Ecolab Inc information on this page should be used as a complementary analysis to other Ecolab's statistical models used to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try Commodity Channel Index module to use Commodity Channel Index to analyze current equity momentum.

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Is Ecolab's industry expected to grow? Or is there an opportunity to expand the business' product line in the future? Factors like these will boost the valuation of Ecolab. If investors know Ecolab will grow in the future, the company's valuation will be higher. The financial industry is built on trying to define current growth potential and future valuation accurately. All the valuation information about Ecolab listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
Quarterly Earnings Growth YOY
0.08
Market Capitalization
41.4 B
Quarterly Revenue Growth YOY
0.11
Return On Assets
0.0583
Return On Equity
16.12
The market value of Ecolab Inc is measured differently than its book value, which is the value of Ecolab that is recorded on the company's balance sheet. Investors also form their own opinion of Ecolab's value that differs from its market value or its book value, called intrinsic value, which is Ecolab's true underlying value. Investors use various methods to calculate intrinsic value and buy a stock when its market value falls below its intrinsic value. Because Ecolab's market value can be influenced by many factors that don't directly affect Ecolab's underlying business (such as a pandemic or basic market pessimism), market value can vary widely from intrinsic value.
Please note, there is a significant difference between Ecolab's value and its price as these two are different measures arrived at by different means. Investors typically determine Ecolab value by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Ecolab's price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.