Correlation Between CECO Environmental and Almacenes Xito
Can any of the company-specific risk be diversified away by investing in both CECO Environmental and Almacenes Xito 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 Almacenes Xito 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 Almacenes xito SA, you can compare the effects of market volatilities on CECO Environmental and Almacenes Xito 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 Almacenes Xito. Check out your portfolio center. Please also check ongoing floating volatility patterns of CECO Environmental and Almacenes Xito.
Diversification Opportunities for CECO Environmental and Almacenes Xito
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CECO and Almacenes is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding CECO Environmental Corp and Almacenes xito SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Almacenes xito SA 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 Almacenes Xito. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Almacenes xito SA has no effect on the direction of CECO Environmental i.e., CECO Environmental and Almacenes Xito go up and down completely randomly.
Pair Corralation between CECO Environmental and Almacenes Xito
Given the investment horizon of 90 days CECO Environmental Corp is expected to generate 1.72 times more return on investment than Almacenes Xito. However, CECO Environmental is 1.72 times more volatile than Almacenes xito SA. It trades about 0.51 of its potential returns per unit of risk. Almacenes xito SA is currently generating about -0.23 per unit of risk. If you would invest 2,347 in CECO Environmental Corp on September 2, 2024 and sell it today you would earn a total of 858.00 from holding CECO Environmental Corp or generate 36.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CECO Environmental Corp vs. Almacenes xito SA
Performance |
| Timeline |
| CECO Environmental Corp |
| Almacenes xito SA |
CECO Environmental and Almacenes Xito Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CECO Environmental and Almacenes Xito
The main advantage of trading using opposite CECO Environmental and Almacenes Xito positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CECO Environmental position performs unexpectedly, Almacenes Xito 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 Almacenes Xito will offset losses from the drop in Almacenes Xito's long position.| CECO Environmental vs. Federal Signal | CECO Environmental vs. Zurn Elkay Water | CECO Environmental vs. Fuel Tech | CECO Environmental vs. Energy Recovery |
| Almacenes Xito vs. Virco Manufacturing | Almacenes Xito vs. Postal Realty Trust | Almacenes Xito vs. Mativ Holdings | Almacenes Xito vs. Cleantech Power 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 Stocks Directory module to find actively traded stocks across global markets.
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