Correlation Between CECO Environmental and Coursera
Can any of the company-specific risk be diversified away by investing in both CECO Environmental and Coursera 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 Coursera 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 Coursera, you can compare the effects of market volatilities on CECO Environmental and Coursera 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 Coursera. Check out your portfolio center. Please also check ongoing floating volatility patterns of CECO Environmental and Coursera.
Diversification Opportunities for CECO Environmental and Coursera
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CECO and Coursera is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding CECO Environmental Corp and Coursera in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coursera 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 Coursera. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coursera has no effect on the direction of CECO Environmental i.e., CECO Environmental and Coursera go up and down completely randomly.
Pair Corralation between CECO Environmental and Coursera
Given the investment horizon of 90 days CECO Environmental Corp is expected to generate 1.73 times more return on investment than Coursera. However, CECO Environmental is 1.73 times more volatile than Coursera. It trades about 0.24 of its potential returns per unit of risk. Coursera is currently generating about 0.15 per unit of risk. If you would invest 2,631 in CECO Environmental Corp on August 28, 2024 and sell it today you would earn a total of 668.00 from holding CECO Environmental Corp or generate 25.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CECO Environmental Corp vs. Coursera
Performance |
| Timeline |
| CECO Environmental Corp |
| Coursera |
CECO Environmental and Coursera Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CECO Environmental and Coursera
The main advantage of trading using opposite CECO Environmental and Coursera positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CECO Environmental position performs unexpectedly, Coursera 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 Coursera will offset losses from the drop in Coursera's long position.| CECO Environmental vs. Federal Signal | CECO Environmental vs. Zurn Elkay Water | CECO Environmental vs. Fuel Tech | CECO Environmental vs. Energy Recovery |
| Coursera vs. American Public Education | Coursera vs. Lincoln Educational Services | Coursera vs. Adtalem Global Education |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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