Correlation Between CECO Environmental and Cleantech Power
Can any of the company-specific risk be diversified away by investing in both CECO Environmental and Cleantech Power 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 Cleantech Power 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 Cleantech Power Corp, you can compare the effects of market volatilities on CECO Environmental and Cleantech Power 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 Cleantech Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of CECO Environmental and Cleantech Power.
Diversification Opportunities for CECO Environmental and Cleantech Power
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between CECO and Cleantech is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding CECO Environmental Corp and Cleantech Power Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cleantech Power Corp 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 Cleantech Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cleantech Power Corp has no effect on the direction of CECO Environmental i.e., CECO Environmental and Cleantech Power go up and down completely randomly.
Pair Corralation between CECO Environmental and Cleantech Power
Given the investment horizon of 90 days CECO Environmental is expected to generate 33.31 times less return on investment than Cleantech Power. But when comparing it to its historical volatility, CECO Environmental Corp is 27.39 times less risky than Cleantech Power. It trades about 0.08 of its potential returns per unit of risk. Cleantech Power Corp is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 17.00 in Cleantech Power Corp on August 26, 2024 and sell it today you would lose (16.41) from holding Cleantech Power Corp or give up 96.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 92.76% |
| Values | Daily Returns |
CECO Environmental Corp vs. Cleantech Power Corp
Performance |
| Timeline |
| CECO Environmental Corp |
| Cleantech Power Corp |
CECO Environmental and Cleantech Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CECO Environmental and Cleantech Power
The main advantage of trading using opposite CECO Environmental and Cleantech Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CECO Environmental position performs unexpectedly, Cleantech Power 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 Cleantech Power will offset losses from the drop in Cleantech Power's long position.| CECO Environmental vs. Federal Signal | CECO Environmental vs. Zurn Elkay Water | CECO Environmental vs. Fuel Tech | CECO Environmental vs. 374Water Common Stock |
| Cleantech Power vs. Legacy Education | Cleantech Power vs. NVIDIA | Cleantech Power vs. Apple Inc | Cleantech Power vs. Microsoft |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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