Correlation Between Ecolab and Origin Investment

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

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

Diversification Opportunities for Ecolab and Origin Investment

-0.38

Correlation Coefficient

Ecolab  Origin Investment

Very good diversification

The 3 months correlation between Ecolab and Origin is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Ecolab Inc and Origin Investment Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Origin Investment 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 Origin Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Origin Investment Corp has no effect on the direction of Ecolab i.e., Ecolab and Origin Investment go up and down completely randomly.

Pair Corralation between Ecolab and Origin Investment

Considering the 90-day investment horizon Ecolab Inc is expected to generate 7.53 times more return on investment than Origin Investment. However, Ecolab is 7.53 times more volatile than Origin Investment Corp. It trades about 0.07 of its potential returns per unit of risk. Origin Investment Corp is currently generating about 0.22 per unit of risk. If you would invest  25,200  in Ecolab Inc on May 1, 2025 and sell it today you would earn a total of  1,113  from holding Ecolab Inc or generate 4.42% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	32.26%
Values	Daily Returns

Ecolab Inc  vs.  Origin Investment Corp

Ecolab Inc

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Ecolab Inc are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. 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.

Origin Investment Corp

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Origin Investment Corp are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Origin Investment is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Ecolab and Origin Investment

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

The idea behind Ecolab Inc and Origin Investment 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.

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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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.