Correlation Between CECO Environmental and Hurco Companies
Can any of the company-specific risk be diversified away by investing in both CECO Environmental and Hurco Companies 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 Hurco Companies 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 Hurco Companies, you can compare the effects of market volatilities on CECO Environmental and Hurco Companies 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 Hurco Companies. Check out your portfolio center. Please also check ongoing floating volatility patterns of CECO Environmental and Hurco Companies.
Diversification Opportunities for CECO Environmental and Hurco Companies
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between CECO and Hurco is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding CECO Environmental Corp and Hurco Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hurco Companies 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 Hurco Companies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hurco Companies has no effect on the direction of CECO Environmental i.e., CECO Environmental and Hurco Companies go up and down completely randomly.
Pair Corralation between CECO Environmental and Hurco Companies
Given the investment horizon of 90 days CECO Environmental Corp is expected to under-perform the Hurco Companies. But the stock apears to be less risky and, when comparing its historical volatility, CECO Environmental Corp is 1.18 times less risky than Hurco Companies. The stock trades about -0.16 of its potential returns per unit of risk. The Hurco Companies is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 1,978 in Hurco Companies on November 3, 2024 and sell it today you would earn a total of 171.00 from holding Hurco Companies or generate 8.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CECO Environmental Corp vs. Hurco Companies
Performance |
| Timeline |
| CECO Environmental Corp |
| Hurco Companies |
CECO Environmental and Hurco Companies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CECO Environmental and Hurco Companies
The main advantage of trading using opposite CECO Environmental and Hurco Companies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CECO Environmental position performs unexpectedly, Hurco Companies 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 Hurco Companies will offset losses from the drop in Hurco Companies' long position.| CECO Environmental vs. Federal Signal | CECO Environmental vs. Zurn Elkay Water | CECO Environmental vs. Fuel Tech | CECO Environmental vs. Energy Recovery |
| Hurco Companies vs. Enerpac Tool Group | Hurco Companies vs. Enpro Industries | Hurco Companies vs. Omega Flex | Hurco Companies vs. Gorman Rupp |
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.
Other Complementary Tools
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device |