Correlation Between CECO Environmental and SAIHEAT
Can any of the company-specific risk be diversified away by investing in both CECO Environmental and SAIHEAT 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 SAIHEAT 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 SAIHEAT Limited, you can compare the effects of market volatilities on CECO Environmental and SAIHEAT 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 SAIHEAT. Check out your portfolio center. Please also check ongoing floating volatility patterns of CECO Environmental and SAIHEAT.
Diversification Opportunities for CECO Environmental and SAIHEAT
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CECO and SAIHEAT is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding CECO Environmental Corp and SAIHEAT Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SAIHEAT Limited 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 SAIHEAT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SAIHEAT Limited has no effect on the direction of CECO Environmental i.e., CECO Environmental and SAIHEAT go up and down completely randomly.
Pair Corralation between CECO Environmental and SAIHEAT
Given the investment horizon of 90 days CECO Environmental Corp is expected to generate 0.53 times more return on investment than SAIHEAT. However, CECO Environmental Corp is 1.88 times less risky than SAIHEAT. It trades about -0.24 of its potential returns per unit of risk. SAIHEAT Limited is currently generating about -0.28 per unit of risk. If you would invest 2,826 in CECO Environmental Corp on December 4, 2024 and sell it today you would lose (394.00) from holding CECO Environmental Corp or give up 13.94% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CECO Environmental Corp vs. SAIHEAT Limited
Performance |
| Timeline |
| CECO Environmental Corp |
| SAIHEAT Limited |
CECO Environmental and SAIHEAT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CECO Environmental and SAIHEAT
The main advantage of trading using opposite CECO Environmental and SAIHEAT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CECO Environmental position performs unexpectedly, SAIHEAT 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 SAIHEAT will offset losses from the drop in SAIHEAT'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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
Other Complementary Tools
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world |