Correlation Between CECO Environmental and Q2 Holdings

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both CECO Environmental and Q2 Holdings 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 Q2 Holdings 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 Q2 Holdings, you can compare the effects of market volatilities on CECO Environmental and Q2 Holdings 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 Q2 Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of CECO Environmental and Q2 Holdings.

Diversification Opportunities for CECO Environmental and Q2 Holdings

0.09
  Correlation Coefficient

Significant diversification

The 3 months correlation between CECO and QTWO is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding CECO Environmental Corp and Q2 Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Q2 Holdings 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 Q2 Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Q2 Holdings has no effect on the direction of CECO Environmental i.e., CECO Environmental and Q2 Holdings go up and down completely randomly.

Pair Corralation between CECO Environmental and Q2 Holdings

Given the investment horizon of 90 days CECO Environmental is expected to generate 1.25 times less return on investment than Q2 Holdings. In addition to that, CECO Environmental is 1.07 times more volatile than Q2 Holdings. It trades about 0.08 of its total potential returns per unit of risk. Q2 Holdings is currently generating about 0.11 per unit of volatility. If you would invest  2,852  in Q2 Holdings on August 28, 2024 and sell it today you would earn a total of  7,847  from holding Q2 Holdings or generate 275.14% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

CECO Environmental Corp  vs.  Q2 Holdings

 Performance 
       Timeline  
CECO Environmental Corp 

Risk-Adjusted Performance

7 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in CECO Environmental Corp are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain fundamental indicators, CECO Environmental displayed solid returns over the last few months and may actually be approaching a breakup point.
Q2 Holdings 

Risk-Adjusted Performance

20 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Q2 Holdings are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Q2 Holdings displayed solid returns over the last few months and may actually be approaching a breakup point.

CECO Environmental and Q2 Holdings Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with CECO Environmental and Q2 Holdings

The main advantage of trading using opposite CECO Environmental and Q2 Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CECO Environmental position performs unexpectedly, Q2 Holdings 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 Q2 Holdings will offset losses from the drop in Q2 Holdings' long position.
The idea behind CECO Environmental Corp and Q2 Holdings pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.

Other Complementary Tools

Sign In To Macroaxis
Sign in to explore Macroaxis' wealth optimization platform and fintech modules
Portfolio Volatility
Check portfolio volatility and analyze historical return density to properly model market risk
Volatility Analysis
Get historical volatility and risk analysis based on latest market data
Alpha Finder
Use alpha and beta coefficients to find investment opportunities after accounting for the risk
Bond Analysis
Evaluate and analyze corporate bonds as a potential investment for your portfolios.