Correlation Between CECO Environmental and HUMANA
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By analyzing existing cross correlation between CECO Environmental Corp and HUMANA INC, you can compare the effects of market volatilities on CECO Environmental and HUMANA 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 HUMANA. Check out your portfolio center. Please also check ongoing floating volatility patterns of CECO Environmental and HUMANA.
Diversification Opportunities for CECO Environmental and HUMANA
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CECO and HUMANA is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding CECO Environmental Corp and HUMANA INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HUMANA INC 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 HUMANA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HUMANA INC has no effect on the direction of CECO Environmental i.e., CECO Environmental and HUMANA go up and down completely randomly.
Pair Corralation between CECO Environmental and HUMANA
Given the investment horizon of 90 days CECO Environmental Corp is expected to generate 1.53 times more return on investment than HUMANA. However, CECO Environmental is 1.53 times more volatile than HUMANA INC. It trades about 0.26 of its potential returns per unit of risk. HUMANA INC is currently generating about 0.09 per unit of risk. If you would invest 2,919 in CECO Environmental Corp on October 19, 2024 and sell it today you would earn a total of 296.00 from holding CECO Environmental Corp or generate 10.14% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 95.0% |
Values | Daily Returns |
CECO Environmental Corp vs. HUMANA INC
Performance |
Timeline |
CECO Environmental Corp |
HUMANA INC |
CECO Environmental and HUMANA Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with CECO Environmental and HUMANA
The main advantage of trading using opposite CECO Environmental and HUMANA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CECO Environmental position performs unexpectedly, HUMANA 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 HUMANA will offset losses from the drop in HUMANA'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 Global Correlations module to find global opportunities by holding instruments from different markets.
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