Correlation Between CECO Environmental and MYR
Can any of the company-specific risk be diversified away by investing in both CECO Environmental and MYR 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 MYR 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 MYR Group, you can compare the effects of market volatilities on CECO Environmental and MYR 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 MYR. Check out your portfolio center. Please also check ongoing floating volatility patterns of CECO Environmental and MYR.
Diversification Opportunities for CECO Environmental and MYR
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between CECO and MYR is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding CECO Environmental Corp and MYR Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MYR Group 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 MYR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MYR Group has no effect on the direction of CECO Environmental i.e., CECO Environmental and MYR go up and down completely randomly.
Pair Corralation between CECO Environmental and MYR
Given the investment horizon of 90 days CECO Environmental is expected to generate 1.22 times less return on investment than MYR. But when comparing it to its historical volatility, CECO Environmental Corp is 1.22 times less risky than MYR. It trades about 0.39 of its potential returns per unit of risk. MYR Group is currently generating about 0.39 of returns per unit of risk over similar time horizon. If you would invest 11,533 in MYR Group on August 31, 2024 and sell it today you would earn a total of 4,244 from holding MYR Group or generate 36.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CECO Environmental Corp vs. MYR Group
Performance |
| Timeline |
| CECO Environmental Corp |
| MYR Group |
CECO Environmental and MYR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CECO Environmental and MYR
The main advantage of trading using opposite CECO Environmental and MYR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CECO Environmental position performs unexpectedly, MYR 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 MYR will offset losses from the drop in MYR's long position.| CECO Environmental vs. Federal Signal | CECO Environmental vs. Zurn Elkay Water | CECO Environmental vs. Fuel Tech | CECO Environmental vs. Energy Recovery |
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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