Correlation Between CECO Environmental and Lifevantage
Can any of the company-specific risk be diversified away by investing in both CECO Environmental and Lifevantage 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 Lifevantage 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 Lifevantage, you can compare the effects of market volatilities on CECO Environmental and Lifevantage 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 Lifevantage. Check out your portfolio center. Please also check ongoing floating volatility patterns of CECO Environmental and Lifevantage.
Diversification Opportunities for CECO Environmental and Lifevantage
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CECO and Lifevantage is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding CECO Environmental Corp and Lifevantage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lifevantage 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 Lifevantage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lifevantage has no effect on the direction of CECO Environmental i.e., CECO Environmental and Lifevantage go up and down completely randomly.
Pair Corralation between CECO Environmental and Lifevantage
Given the investment horizon of 90 days CECO Environmental Corp is expected to generate 1.31 times more return on investment than Lifevantage. However, CECO Environmental is 1.31 times more volatile than Lifevantage. It trades about 0.24 of its potential returns per unit of risk. Lifevantage is currently generating about 0.05 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 668.00 from holding CECO Environmental Corp or generate 25.39% 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. Lifevantage
Performance |
| Timeline |
| CECO Environmental Corp |
| Lifevantage |
CECO Environmental and Lifevantage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CECO Environmental and Lifevantage
The main advantage of trading using opposite CECO Environmental and Lifevantage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CECO Environmental position performs unexpectedly, Lifevantage 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 Lifevantage will offset losses from the drop in Lifevantage's long position.| CECO Environmental vs. Federal Signal | CECO Environmental vs. Zurn Elkay Water | CECO Environmental vs. Fuel Tech | CECO Environmental vs. CO2 Solutions |
| Lifevantage vs. Seneca Foods Corp | Lifevantage vs. Central Garden Pet | Lifevantage vs. Central Garden Pet | Lifevantage vs. Lifeway Foods |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Fundamental Analysis View fundamental data based on most recent published financial statements |