Correlation Between CECO Environmental and Summit Environmental
Can any of the company-specific risk be diversified away by investing in both CECO Environmental and Summit Environmental 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 Summit Environmental 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 Summit Environmental, you can compare the effects of market volatilities on CECO Environmental and Summit Environmental 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 Summit Environmental. Check out your portfolio center. Please also check ongoing floating volatility patterns of CECO Environmental and Summit Environmental.
Diversification Opportunities for CECO Environmental and Summit Environmental
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between CECO and Summit is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding CECO Environmental Corp and Summit Environmental in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Summit Environmental 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 Summit Environmental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Summit Environmental has no effect on the direction of CECO Environmental i.e., CECO Environmental and Summit Environmental go up and down completely randomly.
Pair Corralation between CECO Environmental and Summit Environmental
If you would invest 1,184 in CECO Environmental Corp on August 26, 2024 and sell it today you would earn a total of 1,952 from holding CECO Environmental Corp or generate 164.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CECO Environmental Corp vs. Summit Environmental
Performance |
| Timeline |
| CECO Environmental Corp |
| Summit Environmental |
CECO Environmental and Summit Environmental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CECO Environmental and Summit Environmental
The main advantage of trading using opposite CECO Environmental and Summit Environmental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CECO Environmental position performs unexpectedly, Summit Environmental 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 Summit Environmental will offset losses from the drop in Summit Environmental'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 |
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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