Correlation Between CECO Environmental and Cistera Networks
Can any of the company-specific risk be diversified away by investing in both CECO Environmental and Cistera Networks 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 Cistera Networks 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 Cistera Networks, you can compare the effects of market volatilities on CECO Environmental and Cistera Networks 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 Cistera Networks. Check out your portfolio center. Please also check ongoing floating volatility patterns of CECO Environmental and Cistera Networks.
Diversification Opportunities for CECO Environmental and Cistera Networks
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between CECO and Cistera is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding CECO Environmental Corp and Cistera Networks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cistera Networks 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 Cistera Networks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cistera Networks has no effect on the direction of CECO Environmental i.e., CECO Environmental and Cistera Networks go up and down completely randomly.
Pair Corralation between CECO Environmental and Cistera Networks
Given the investment horizon of 90 days CECO Environmental is expected to generate 15.72 times less return on investment than Cistera Networks. But when comparing it to its historical volatility, CECO Environmental Corp is 21.24 times less risky than Cistera Networks. It trades about 0.08 of its potential returns per unit of risk. Cistera Networks is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 0.02 in Cistera Networks on August 26, 2024 and sell it today you would lose (0.01) from holding Cistera Networks or give up 50.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 94.57% |
| Values | Daily Returns |
CECO Environmental Corp vs. Cistera Networks
Performance |
| Timeline |
| CECO Environmental Corp |
| Cistera Networks |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
CECO Environmental and Cistera Networks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CECO Environmental and Cistera Networks
The main advantage of trading using opposite CECO Environmental and Cistera Networks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CECO Environmental position performs unexpectedly, Cistera Networks 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 Cistera Networks will offset losses from the drop in Cistera Networks' long position.| CECO Environmental vs. Federal Signal | CECO Environmental vs. Zurn Elkay Water | CECO Environmental vs. Fuel Tech | CECO Environmental vs. 374Water Common Stock |
| Cistera Networks vs. Western Union Co | Cistera Networks vs. United States Steel | Cistera Networks vs. Juniata Valley Financial | Cistera Networks 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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