Correlation Between CECO Environmental and Ihuman
Can any of the company-specific risk be diversified away by investing in both CECO Environmental and Ihuman 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 Ihuman 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 Ihuman Inc, you can compare the effects of market volatilities on CECO Environmental and Ihuman 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 Ihuman. Check out your portfolio center. Please also check ongoing floating volatility patterns of CECO Environmental and Ihuman.
Diversification Opportunities for CECO Environmental and Ihuman
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between CECO and Ihuman is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding CECO Environmental Corp and Ihuman Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ihuman Inc 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 Ihuman. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ihuman Inc has no effect on the direction of CECO Environmental i.e., CECO Environmental and Ihuman go up and down completely randomly.
Pair Corralation between CECO Environmental and Ihuman
Given the investment horizon of 90 days CECO Environmental Corp is expected to generate 0.7 times more return on investment than Ihuman. However, CECO Environmental Corp is 1.43 times less risky than Ihuman. It trades about 0.08 of its potential returns per unit of risk. Ihuman Inc is currently generating about 0.01 per unit of risk. If you would invest 1,184 in CECO Environmental Corp on August 24, 2024 and sell it today you would earn a total of 1,952 from holding CECO Environmental Corp or generate 164.86% 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. Ihuman Inc
Performance |
| Timeline |
| CECO Environmental Corp |
| Ihuman Inc |
CECO Environmental and Ihuman Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CECO Environmental and Ihuman
The main advantage of trading using opposite CECO Environmental and Ihuman positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CECO Environmental position performs unexpectedly, Ihuman 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 Ihuman will offset losses from the drop in Ihuman's long position.| CECO Environmental vs. China Natural Resources | CECO Environmental vs. Seychelle Environmtl | CECO Environmental vs. Vow ASA | CECO Environmental vs. Eestech |
| Ihuman vs. Boqii Holding Limited | Ihuman vs. Lixiang Education Holding | Ihuman vs. Huize Holding | Ihuman vs. Kuke Music Holding |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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