Correlation Between CECO Environmental and Barinthus Biotherapeutics
Can any of the company-specific risk be diversified away by investing in both CECO Environmental and Barinthus Biotherapeutics 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 Barinthus Biotherapeutics 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 Barinthus Biotherapeutics plc, you can compare the effects of market volatilities on CECO Environmental and Barinthus Biotherapeutics 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 Barinthus Biotherapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of CECO Environmental and Barinthus Biotherapeutics.
Diversification Opportunities for CECO Environmental and Barinthus Biotherapeutics
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between CECO and Barinthus is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding CECO Environmental Corp and Barinthus Biotherapeutics plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barinthus Biotherapeutics 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 Barinthus Biotherapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barinthus Biotherapeutics has no effect on the direction of CECO Environmental i.e., CECO Environmental and Barinthus Biotherapeutics go up and down completely randomly.
Pair Corralation between CECO Environmental and Barinthus Biotherapeutics
Given the investment horizon of 90 days CECO Environmental Corp is expected to generate 0.49 times more return on investment than Barinthus Biotherapeutics. However, CECO Environmental Corp is 2.03 times less risky than Barinthus Biotherapeutics. It trades about 0.18 of its potential returns per unit of risk. Barinthus Biotherapeutics plc is currently generating about -0.06 per unit of risk. If you would invest 2,703 in CECO Environmental Corp on September 13, 2024 and sell it today you would earn a total of 748.00 from holding CECO Environmental Corp or generate 27.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CECO Environmental Corp vs. Barinthus Biotherapeutics plc
Performance |
| Timeline |
| CECO Environmental Corp |
| Barinthus Biotherapeutics |
CECO Environmental and Barinthus Biotherapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CECO Environmental and Barinthus Biotherapeutics
The main advantage of trading using opposite CECO Environmental and Barinthus Biotherapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CECO Environmental position performs unexpectedly, Barinthus Biotherapeutics 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 Barinthus Biotherapeutics will offset losses from the drop in Barinthus Biotherapeutics' long position.| CECO Environmental vs. Federal Signal | CECO Environmental vs. Zurn Elkay Water | CECO Environmental vs. Fuel Tech | CECO Environmental vs. Energy Recovery |
| Barinthus Biotherapeutics vs. Parker Hannifin | Barinthus Biotherapeutics vs. Tritent International Agriculture | Barinthus Biotherapeutics vs. Griffon | Barinthus Biotherapeutics vs. CECO Environmental Corp |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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