Correlation Between Ecolab and First Robinson

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

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

Diversification Opportunities for Ecolab and First Robinson

0.71

Correlation Coefficient

Ecolab  First Robinson

Poor diversification

The 3 months correlation between Ecolab and First is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Ecolab Inc and First Robinson Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Robinson Financial 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 First Robinson. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Robinson Financial has no effect on the direction of Ecolab i.e., Ecolab and First Robinson go up and down completely randomly.

Pair Corralation between Ecolab and First Robinson

Considering the 90-day investment horizon Ecolab is expected to generate 26.51 times less return on investment than First Robinson. But when comparing it to its historical volatility, Ecolab Inc is 1.51 times less risky than First Robinson. It trades about 0.01 of its potential returns per unit of risk. First Robinson Financial is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  4,290  in First Robinson Financial on June 12, 2025 and sell it today you would earn a total of  520.00  from holding First Robinson Financial or generate 12.12% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	96.72%
Values	Daily Returns

Ecolab Inc  vs.  First Robinson Financial

Ecolab Inc

Risk-Adjusted Performance

Weak

Over the last 90 days Ecolab Inc has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

First Robinson Financial

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in First Robinson Financial are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating technical and fundamental indicators, First Robinson exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ecolab and First Robinson

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

The idea behind Ecolab Inc and First Robinson Financial 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.