Correlation Between CECO Environmental and Antero Midstream
Can any of the company-specific risk be diversified away by investing in both CECO Environmental and Antero Midstream 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 CECO Environmental and Antero Midstream into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CECO Environmental Corp and Antero Midstream Partners, you can compare the effects of market volatilities on CECO Environmental and Antero Midstream 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 CECO Environmental with a short position of Antero Midstream. Check out your portfolio center. Please also check ongoing floating volatility patterns of CECO Environmental and Antero Midstream.
Diversification Opportunities for CECO Environmental and Antero Midstream
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between CECO and Antero is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding CECO Environmental Corp and Antero Midstream Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Antero Midstream Partners and CECO Environmental 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 CECO Environmental Corp are associated (or correlated) with Antero Midstream. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Antero Midstream Partners has no effect on the direction of CECO Environmental i.e., CECO Environmental and Antero Midstream go up and down completely randomly.
Pair Corralation between CECO Environmental and Antero Midstream
Given the investment horizon of 90 days CECO Environmental Corp is expected to generate 3.04 times more return on investment than Antero Midstream. However, CECO Environmental is 3.04 times more volatile than Antero Midstream Partners. It trades about 0.21 of its potential returns per unit of risk. Antero Midstream Partners is currently generating about 0.19 per unit of risk. If you would invest 2,631 in CECO Environmental Corp on August 29, 2024 and sell it today you would earn a total of 581.00 from holding CECO Environmental Corp or generate 22.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CECO Environmental Corp vs. Antero Midstream Partners
Performance |
| Timeline |
| CECO Environmental Corp |
| Antero Midstream Partners |
CECO Environmental and Antero Midstream Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CECO Environmental and Antero Midstream
The main advantage of trading using opposite CECO Environmental and Antero Midstream positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CECO Environmental position performs unexpectedly, Antero Midstream 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 Antero Midstream will offset losses from the drop in Antero Midstream's long position.| CECO Environmental vs. Federal Signal | CECO Environmental vs. Zurn Elkay Water | CECO Environmental vs. Fuel Tech | CECO Environmental vs. Energy Recovery |
| Antero Midstream vs. EnLink Midstream LLC | Antero Midstream vs. Western Midstream Partners | Antero Midstream vs. Plains GP Holdings | Antero Midstream vs. Plains All American |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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