Correlation Between Ecolab and Seagate Technology
Can any of the company-specific risk be diversified away by investing in both Ecolab and Seagate Technology 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 Seagate Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ecolab Inc and Seagate Technology PLC, you can compare the effects of market volatilities on Ecolab and Seagate Technology 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 Seagate Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ecolab and Seagate Technology.
Diversification Opportunities for Ecolab and Seagate Technology
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ecolab and Seagate is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Ecolab Inc and Seagate Technology PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seagate Technology PLC 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 Seagate Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seagate Technology PLC has no effect on the direction of Ecolab i.e., Ecolab and Seagate Technology go up and down completely randomly.
Pair Corralation between Ecolab and Seagate Technology
Considering the 90-day investment horizon Ecolab is expected to generate 6.8 times less return on investment than Seagate Technology. But when comparing it to its historical volatility, Ecolab Inc is 1.9 times less risky than Seagate Technology. It trades about 0.07 of its potential returns per unit of risk. Seagate Technology PLC is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 12,697 in Seagate Technology PLC on June 4, 2025 and sell it today you would earn a total of 4,043 from holding Seagate Technology PLC or generate 31.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ecolab Inc vs. Seagate Technology PLC
Performance |
| Timeline |
| Ecolab Inc |
| Seagate Technology PLC |
Ecolab and Seagate Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ecolab and Seagate Technology
The main advantage of trading using opposite Ecolab and Seagate Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ecolab position performs unexpectedly, Seagate Technology 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 Seagate Technology will offset losses from the drop in Seagate Technology's long position.| Ecolab vs. Linde plc Ordinary | Ecolab vs. PPG Industries | Ecolab vs. Sherwin Williams Co | Ecolab vs. LyondellBasell Industries NV |
| Seagate Technology vs. NetApp Inc | Seagate Technology vs. Dell Technologies | Seagate Technology vs. Pure Storage | Seagate Technology vs. HP Inc |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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