Correlation Between CECO Environmental and 281020AT4
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By analyzing existing cross correlation between CECO Environmental Corp and EIX 5, you can compare the effects of market volatilities on CECO Environmental and 281020AT4 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 281020AT4. Check out your portfolio center. Please also check ongoing floating volatility patterns of CECO Environmental and 281020AT4.
Diversification Opportunities for CECO Environmental and 281020AT4
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between CECO and 281020AT4 is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding CECO Environmental Corp and EIX 5 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 281020AT4 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 281020AT4. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 281020AT4 has no effect on the direction of CECO Environmental i.e., CECO Environmental and 281020AT4 go up and down completely randomly.
Pair Corralation between CECO Environmental and 281020AT4
Given the investment horizon of 90 days CECO Environmental Corp is expected to generate 1.66 times more return on investment than 281020AT4. However, CECO Environmental is 1.66 times more volatile than EIX 5. It trades about 0.09 of its potential returns per unit of risk. EIX 5 is currently generating about -0.07 per unit of risk. If you would invest 2,364 in CECO Environmental Corp on September 2, 2024 and sell it today you would earn a total of 841.00 from holding CECO Environmental Corp or generate 35.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.41% |
| Values | Daily Returns |
CECO Environmental Corp vs. EIX 5
Performance |
| Timeline |
| CECO Environmental Corp |
| 281020AT4 |
CECO Environmental and 281020AT4 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CECO Environmental and 281020AT4
The main advantage of trading using opposite CECO Environmental and 281020AT4 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CECO Environmental position performs unexpectedly, 281020AT4 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 281020AT4 will offset losses from the drop in 281020AT4's long position.| CECO Environmental vs. Federal Signal | CECO Environmental vs. Zurn Elkay Water | CECO Environmental vs. Fuel Tech | CECO Environmental vs. Energy Recovery |
| 281020AT4 vs. National CineMedia | 281020AT4 vs. Reservoir Media | 281020AT4 vs. SEI Investments | 281020AT4 vs. Canlan Ice Sports |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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