Correlation Between Ecolab and CI Financial

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

By analyzing existing cross correlation between Ecolab Inc and CI Financial Corp, you can compare the effects of market volatilities on Ecolab and CI Financial 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 CI Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ecolab and CI Financial.

Diversification Opportunities for Ecolab and CI Financial

0.0

Correlation Coefficient

Ecolab  CI Financial

Pay attention - limited upside

The 3 months correlation between Ecolab and CIFAF is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Ecolab Inc and CI Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CI Financial Corp 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 CI Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CI Financial Corp has no effect on the direction of Ecolab i.e., Ecolab and CI Financial go up and down completely randomly.

Pair Corralation between Ecolab and CI Financial

If you would invest (100.00) in CI Financial Corp on January 30, 2024 and sell it today you would earn a total of  100.00  from holding CI Financial Corp or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Ecolab Inc  vs.  CI Financial Corp

Ecolab Inc

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ecolab Inc are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite quite unsteady fundamental indicators, Ecolab may actually be approaching a critical reversion point that can send shares even higher in May 2024.

CI Financial Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CI Financial Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, CI Financial is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Ecolab and CI Financial

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

The idea behind Ecolab Inc and CI Financial Corp 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.

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 Bonds Directory module to find actively traded corporate debentures issued by US companies.