Correlation Between CECO Environmental and Electrovaya Common
Can any of the company-specific risk be diversified away by investing in both CECO Environmental and Electrovaya Common 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 Electrovaya Common 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 Electrovaya Common Shares, you can compare the effects of market volatilities on CECO Environmental and Electrovaya Common 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 Electrovaya Common. Check out your portfolio center. Please also check ongoing floating volatility patterns of CECO Environmental and Electrovaya Common.
Diversification Opportunities for CECO Environmental and Electrovaya Common
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CECO and Electrovaya is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding CECO Environmental Corp and Electrovaya Common Shares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Electrovaya Common Shares 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 Electrovaya Common. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Electrovaya Common Shares has no effect on the direction of CECO Environmental i.e., CECO Environmental and Electrovaya Common go up and down completely randomly.
Pair Corralation between CECO Environmental and Electrovaya Common
Given the investment horizon of 90 days CECO Environmental Corp is expected to generate 1.03 times more return on investment than Electrovaya Common. However, CECO Environmental is 1.03 times more volatile than Electrovaya Common Shares. It trades about 0.1 of its potential returns per unit of risk. Electrovaya Common Shares is currently generating about -0.03 per unit of risk. If you would invest 1,933 in CECO Environmental Corp on August 28, 2024 and sell it today you would earn a total of 1,366 from holding CECO Environmental Corp or generate 70.67% 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. Electrovaya Common Shares
Performance |
| Timeline |
| CECO Environmental Corp |
| Electrovaya Common Shares |
CECO Environmental and Electrovaya Common Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CECO Environmental and Electrovaya Common
The main advantage of trading using opposite CECO Environmental and Electrovaya Common positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CECO Environmental position performs unexpectedly, Electrovaya Common 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 Electrovaya Common will offset losses from the drop in Electrovaya Common's long position.| CECO Environmental vs. Federal Signal | CECO Environmental vs. Zurn Elkay Water | CECO Environmental vs. Fuel Tech | CECO Environmental vs. Energy Recovery |
| Electrovaya Common vs. Bloom Energy Corp | Electrovaya Common vs. Eos Energy Enterprises | Electrovaya Common vs. Sunrise New Energy | Electrovaya Common vs. GrafTech International |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
Other Complementary Tools
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals |