Correlation Between CECO Environmental and Sun Life
Can any of the company-specific risk be diversified away by investing in both CECO Environmental and Sun Life 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 Sun Life 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 Sun Life Financial, you can compare the effects of market volatilities on CECO Environmental and Sun Life 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 Sun Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of CECO Environmental and Sun Life.
Diversification Opportunities for CECO Environmental and Sun Life
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between CECO and Sun is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding CECO Environmental Corp and Sun Life Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sun Life Financial 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 Sun Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sun Life Financial has no effect on the direction of CECO Environmental i.e., CECO Environmental and Sun Life go up and down completely randomly.
Pair Corralation between CECO Environmental and Sun Life
Given the investment horizon of 90 days CECO Environmental Corp is expected to generate 4.18 times more return on investment than Sun Life. However, CECO Environmental is 4.18 times more volatile than Sun Life Financial. It trades about 0.22 of its potential returns per unit of risk. Sun Life Financial is currently generating about 0.31 per unit of risk. If you would invest 2,631 in CECO Environmental Corp on August 28, 2024 and sell it today you would earn a total of 613.00 from holding CECO Environmental Corp or generate 23.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CECO Environmental Corp vs. Sun Life Financial
Performance |
| Timeline |
| CECO Environmental Corp |
| Sun Life Financial |
CECO Environmental and Sun Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CECO Environmental and Sun Life
The main advantage of trading using opposite CECO Environmental and Sun Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CECO Environmental position performs unexpectedly, Sun Life 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 Sun Life will offset losses from the drop in Sun Life's long position.| CECO Environmental vs. Federal Signal | CECO Environmental vs. Zurn Elkay Water | CECO Environmental vs. Fuel Tech | CECO Environmental vs. Energy Recovery |
| Sun Life vs. Hartford Financial Services | Sun Life vs. Goosehead Insurance | Sun Life vs. International General Insurance | Sun Life vs. Enstar Group Limited |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
Other Complementary Tools
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets |