Correlation Between CECO Environmental and Sun Country
Can any of the company-specific risk be diversified away by investing in both CECO Environmental and Sun Country 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 Country 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 Country Airlines, you can compare the effects of market volatilities on CECO Environmental and Sun Country 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 Country. Check out your portfolio center. Please also check ongoing floating volatility patterns of CECO Environmental and Sun Country.
Diversification Opportunities for CECO Environmental and Sun Country
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between CECO and Sun is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding CECO Environmental Corp and Sun Country Airlines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sun Country Airlines 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 Country. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sun Country Airlines has no effect on the direction of CECO Environmental i.e., CECO Environmental and Sun Country go up and down completely randomly.
Pair Corralation between CECO Environmental and Sun Country
Given the investment horizon of 90 days CECO Environmental Corp is expected to generate 1.06 times more return on investment than Sun Country. However, CECO Environmental is 1.06 times more volatile than Sun Country Airlines. It trades about 0.51 of its potential returns per unit of risk. Sun Country Airlines is currently generating about -0.07 per unit of risk. If you would invest 2,347 in CECO Environmental Corp on September 2, 2024 and sell it today you would earn a total of 858.00 from holding CECO Environmental Corp or generate 36.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CECO Environmental Corp vs. Sun Country Airlines
Performance |
| Timeline |
| CECO Environmental Corp |
| Sun Country Airlines |
CECO Environmental and Sun Country Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CECO Environmental and Sun Country
The main advantage of trading using opposite CECO Environmental and Sun Country positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CECO Environmental position performs unexpectedly, Sun Country 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 Country will offset losses from the drop in Sun Country'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 Country vs. Canadian Pacific Railway | Sun Country vs. Werner Enterprises | Sun Country vs. Canadian National Railway | Sun Country vs. CSX Corporation |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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