Correlation Between China Tontine and CECO Environmental
Can any of the company-specific risk be diversified away by investing in both China Tontine 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 China Tontine and CECO Environmental into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Tontine Wines and CECO Environmental Corp, you can compare the effects of market volatilities on China Tontine 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 China Tontine with a short position of CECO Environmental. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Tontine and CECO Environmental.
Diversification Opportunities for China Tontine and CECO Environmental
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between China and CECO is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding China Tontine Wines and CECO Environmental Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CECO Environmental Corp and China Tontine 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 China Tontine Wines 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 Corp has no effect on the direction of China Tontine i.e., China Tontine and CECO Environmental go up and down completely randomly.
Pair Corralation between China Tontine and CECO Environmental
Assuming the 90 days horizon China Tontine Wines is expected to generate 28.43 times more return on investment than CECO Environmental. However, China Tontine is 28.43 times more volatile than CECO Environmental Corp. It trades about 0.09 of its potential returns per unit of risk. CECO Environmental Corp is currently generating about 0.1 per unit of risk. If you would invest 0.40 in China Tontine Wines on September 12, 2024 and sell it today you would earn a total of 6.70 from holding China Tontine Wines or generate 1675.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.15% |
| Values | Daily Returns |
China Tontine Wines vs. CECO Environmental Corp
Performance |
| Timeline |
| China Tontine Wines |
| CECO Environmental Corp |
China Tontine and CECO Environmental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Tontine and CECO Environmental
The main advantage of trading using opposite China Tontine and CECO Environmental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Tontine 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.| China Tontine vs. Andrew Peller Limited | China Tontine vs. Aristocrat Group Corp | China Tontine vs. Iconic Brands | China Tontine vs. Naked Wines plc |
| CECO Environmental vs. Federal Signal | CECO Environmental vs. Zurn Elkay Water | CECO Environmental vs. Fuel Tech | CECO Environmental vs. Energy Recovery |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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