Correlation Between PLAYTIKA HOLDING and CECO ENVIRONMENTAL

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Can any of the company-specific risk be diversified away by investing in both PLAYTIKA HOLDING and CECO ENVIRONMENTAL 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 PLAYTIKA HOLDING and CECO ENVIRONMENTAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PLAYTIKA HOLDING DL 01 and CECO ENVIRONMENTAL, you can compare the effects of market volatilities on PLAYTIKA HOLDING and CECO ENVIRONMENTAL 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 PLAYTIKA HOLDING with a short position of CECO ENVIRONMENTAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of PLAYTIKA HOLDING and CECO ENVIRONMENTAL.

Diversification Opportunities for PLAYTIKA HOLDING and CECO ENVIRONMENTAL

PLAYTIKACECODiversified AwayPLAYTIKACECODiversified Away100%
0.07
  Correlation Coefficient

Significant diversification

The 3 months correlation between PLAYTIKA and CECO is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding PLAYTIKA HOLDING DL 01 and CECO ENVIRONMENTAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CECO ENVIRONMENTAL and PLAYTIKA HOLDING 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 PLAYTIKA HOLDING DL 01 are associated (or correlated) with CECO ENVIRONMENTAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CECO ENVIRONMENTAL has no effect on the direction of PLAYTIKA HOLDING i.e., PLAYTIKA HOLDING and CECO ENVIRONMENTAL go up and down completely randomly.

Pair Corralation between PLAYTIKA HOLDING and CECO ENVIRONMENTAL

Assuming the 90 days horizon PLAYTIKA HOLDING DL 01 is expected to under-perform the CECO ENVIRONMENTAL. But the stock apears to be less risky and, when comparing its historical volatility, PLAYTIKA HOLDING DL 01 is 1.6 times less risky than CECO ENVIRONMENTAL. The stock trades about -0.05 of its potential returns per unit of risk. The CECO ENVIRONMENTAL is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  2,554  in CECO ENVIRONMENTAL on November 18, 2024 and sell it today you would lose (150.00) from holding CECO ENVIRONMENTAL or give up 5.87% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

PLAYTIKA HOLDING DL 01  vs.  CECO ENVIRONMENTAL

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -10010203040
JavaScript chart by amCharts 3.21.158II WCE
       Timeline  
PLAYTIKA HOLDING 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days PLAYTIKA HOLDING DL 01 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb6.46.66.877.27.47.67.88
CECO ENVIRONMENTAL 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days CECO ENVIRONMENTAL has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, CECO ENVIRONMENTAL is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb24252627282930313233

PLAYTIKA HOLDING and CECO ENVIRONMENTAL Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-3.32-2.49-1.66-0.820.00.811.612.423.23 0.040.050.060.070.080.09
JavaScript chart by amCharts 3.21.158II WCE
       Returns  

Pair Trading with PLAYTIKA HOLDING and CECO ENVIRONMENTAL

The main advantage of trading using opposite PLAYTIKA HOLDING and CECO ENVIRONMENTAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PLAYTIKA HOLDING position performs unexpectedly, CECO ENVIRONMENTAL 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 CECO ENVIRONMENTAL will offset losses from the drop in CECO ENVIRONMENTAL's long position.
The idea behind PLAYTIKA HOLDING DL 01 and CECO ENVIRONMENTAL 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.

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