Correlation Between MicroAlgo and Ecolab

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

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

Diversification Opportunities for MicroAlgo and Ecolab

-0.77

Correlation Coefficient

MicroAlgo  Ecolab

Pay attention - limited upside

The 3 months correlation between MicroAlgo and Ecolab is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding MicroAlgo and Ecolab Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ecolab Inc and MicroAlgo 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 MicroAlgo 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 MicroAlgo i.e., MicroAlgo and Ecolab go up and down completely randomly.

Pair Corralation between MicroAlgo and Ecolab

Given the investment horizon of 90 days MicroAlgo is expected to under-perform the Ecolab. In addition to that, MicroAlgo is 10.75 times more volatile than Ecolab Inc. It trades about -0.27 of its total potential returns per unit of risk. Ecolab Inc is currently generating about 0.12 per unit of volatility. If you would invest  25,386  in Ecolab Inc on May 12, 2025 and sell it today you would earn a total of  1,901  from holding Ecolab Inc or generate 7.49% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

MicroAlgo  vs.  Ecolab Inc

MicroAlgo

Risk-Adjusted Performance

Weakest

Over the last 90 days MicroAlgo has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in September 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Ecolab Inc

Risk-Adjusted Performance

Fair

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 unfluctuating fundamental indicators, Ecolab may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with MicroAlgo and Ecolab

The main advantage of trading using opposite MicroAlgo and Ecolab positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MicroAlgo 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.

The idea behind MicroAlgo 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.

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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.