Correlation Between CECO Environmental and Canon
Can any of the company-specific risk be diversified away by investing in both CECO Environmental and Canon 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 Canon 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 Canon Inc ADR, you can compare the effects of market volatilities on CECO Environmental and Canon 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 Canon. Check out your portfolio center. Please also check ongoing floating volatility patterns of CECO Environmental and Canon.
Diversification Opportunities for CECO Environmental and Canon
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CECO and Canon is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding CECO Environmental Corp and Canon Inc ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canon Inc ADR 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 Canon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canon Inc ADR has no effect on the direction of CECO Environmental i.e., CECO Environmental and Canon go up and down completely randomly.
Pair Corralation between CECO Environmental and Canon
If you would invest 2,755 in CECO Environmental Corp on November 2, 2024 and sell it today you would earn a total of 139.00 from holding CECO Environmental Corp or generate 5.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 0.97% |
| Values | Daily Returns |
CECO Environmental Corp vs. Canon Inc ADR
Performance |
| Timeline |
| CECO Environmental Corp |
| Canon Inc ADR |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
CECO Environmental and Canon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CECO Environmental and Canon
The main advantage of trading using opposite CECO Environmental and Canon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CECO Environmental position performs unexpectedly, Canon 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 Canon will offset losses from the drop in Canon's long position.| CECO Environmental vs. Federal Signal | CECO Environmental vs. Zurn Elkay Water | CECO Environmental vs. Fuel Tech | CECO Environmental vs. Energy Recovery |
| Canon vs. Ironveld Plc | Canon vs. Insteel Industries | Canon vs. CECO Environmental Corp | Canon vs. Inflection Point Acquisition |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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