Correlation Between CECO Environmental and Kingsmen Creatives
Can any of the company-specific risk be diversified away by investing in both CECO Environmental and Kingsmen Creatives 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 Kingsmen Creatives 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 Kingsmen Creatives, you can compare the effects of market volatilities on CECO Environmental and Kingsmen Creatives 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 Kingsmen Creatives. Check out your portfolio center. Please also check ongoing floating volatility patterns of CECO Environmental and Kingsmen Creatives.
Diversification Opportunities for CECO Environmental and Kingsmen Creatives
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CECO and Kingsmen is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding CECO Environmental Corp and Kingsmen Creatives in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kingsmen Creatives 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 Kingsmen Creatives. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kingsmen Creatives has no effect on the direction of CECO Environmental i.e., CECO Environmental and Kingsmen Creatives go up and down completely randomly.
Pair Corralation between CECO Environmental and Kingsmen Creatives
Given the investment horizon of 90 days CECO Environmental Corp is expected to generate 0.74 times more return on investment than Kingsmen Creatives. However, CECO Environmental Corp is 1.35 times less risky than Kingsmen Creatives. It trades about 0.08 of its potential returns per unit of risk. Kingsmen Creatives is currently generating about 0.03 per unit of risk. If you would invest 1,159 in CECO Environmental Corp on September 19, 2024 and sell it today you would earn a total of 1,961 from holding CECO Environmental Corp or generate 169.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 63.64% |
| Values | Daily Returns |
CECO Environmental Corp vs. Kingsmen Creatives
Performance |
| Timeline |
| CECO Environmental Corp |
| Kingsmen Creatives |
CECO Environmental and Kingsmen Creatives Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CECO Environmental and Kingsmen Creatives
The main advantage of trading using opposite CECO Environmental and Kingsmen Creatives positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CECO Environmental position performs unexpectedly, Kingsmen Creatives 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 Kingsmen Creatives will offset losses from the drop in Kingsmen Creatives' long position.| CECO Environmental vs. Zurn Elkay Water | CECO Environmental vs. Federal Signal | CECO Environmental vs. CO2 Solutions | CECO Environmental vs. Fuel Tech |
| Kingsmen Creatives vs. Cleantech Power Corp | Kingsmen Creatives vs. EMCOR Group | Kingsmen Creatives vs. Keurig Dr Pepper | Kingsmen Creatives vs. CECO Environmental 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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