Correlation Between CECO Environmental and Fidus Investment
Can any of the company-specific risk be diversified away by investing in both CECO Environmental and Fidus Investment 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 Fidus Investment 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 Fidus Investment Corp, you can compare the effects of market volatilities on CECO Environmental and Fidus Investment 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 Fidus Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of CECO Environmental and Fidus Investment.
Diversification Opportunities for CECO Environmental and Fidus Investment
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CECO and Fidus is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding CECO Environmental Corp and Fidus Investment Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidus Investment Corp 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 Fidus Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidus Investment Corp has no effect on the direction of CECO Environmental i.e., CECO Environmental and Fidus Investment go up and down completely randomly.
Pair Corralation between CECO Environmental and Fidus Investment
Given the investment horizon of 90 days CECO Environmental Corp is expected to generate 5.81 times more return on investment than Fidus Investment. However, CECO Environmental is 5.81 times more volatile than Fidus Investment Corp. It trades about 0.22 of its potential returns per unit of risk. Fidus Investment Corp is currently generating about 0.38 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 613.00 from holding CECO Environmental Corp or generate 23.3% 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. Fidus Investment Corp
Performance |
| Timeline |
| CECO Environmental Corp |
| Fidus Investment Corp |
CECO Environmental and Fidus Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CECO Environmental and Fidus Investment
The main advantage of trading using opposite CECO Environmental and Fidus Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CECO Environmental position performs unexpectedly, Fidus Investment 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 Fidus Investment will offset losses from the drop in Fidus Investment's long position.| CECO Environmental vs. Federal Signal | CECO Environmental vs. Zurn Elkay Water | CECO Environmental vs. Fuel Tech | CECO Environmental vs. Energy Recovery |
| Fidus Investment vs. Aurora Innovation | Fidus Investment vs. HUMANA INC | Fidus Investment vs. Aquagold International | Fidus Investment vs. Barloworld Ltd ADR |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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