Correlation Between CECO Environmental and 06051GGA1
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By analyzing existing cross correlation between CECO Environmental Corp and BANK AMER P, you can compare the effects of market volatilities on CECO Environmental and 06051GGA1 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 06051GGA1. Check out your portfolio center. Please also check ongoing floating volatility patterns of CECO Environmental and 06051GGA1.
Diversification Opportunities for CECO Environmental and 06051GGA1
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CECO and 06051GGA1 is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding CECO Environmental Corp and BANK AMER P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BANK AMER P 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 06051GGA1. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BANK AMER P has no effect on the direction of CECO Environmental i.e., CECO Environmental and 06051GGA1 go up and down completely randomly.
Pair Corralation between CECO Environmental and 06051GGA1
Given the investment horizon of 90 days CECO Environmental Corp is expected to generate 11.37 times more return on investment than 06051GGA1. However, CECO Environmental is 11.37 times more volatile than BANK AMER P. It trades about 0.08 of its potential returns per unit of risk. BANK AMER P is currently generating about 0.07 per unit of risk. If you would invest 2,453 in CECO Environmental Corp on August 31, 2024 and sell it today you would earn a total of 752.00 from holding CECO Environmental Corp or generate 30.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 97.64% |
| Values | Daily Returns |
CECO Environmental Corp vs. BANK AMER P
Performance |
| Timeline |
| CECO Environmental Corp |
| BANK AMER P |
CECO Environmental and 06051GGA1 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CECO Environmental and 06051GGA1
The main advantage of trading using opposite CECO Environmental and 06051GGA1 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CECO Environmental position performs unexpectedly, 06051GGA1 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 06051GGA1 will offset losses from the drop in 06051GGA1's long position.| CECO Environmental vs. Federal Signal | CECO Environmental vs. Zurn Elkay Water | CECO Environmental vs. Fuel Tech | CECO Environmental vs. Energy Recovery |
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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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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