Correlation Between CECO Environmental and Zurn Elkay
Can any of the company-specific risk be diversified away by investing in both CECO Environmental and Zurn Elkay 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 Zurn Elkay 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 Zurn Elkay Water, you can compare the effects of market volatilities on CECO Environmental and Zurn Elkay 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 Zurn Elkay. Check out your portfolio center. Please also check ongoing floating volatility patterns of CECO Environmental and Zurn Elkay.
Diversification Opportunities for CECO Environmental and Zurn Elkay
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CECO and Zurn is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding CECO Environmental Corp and Zurn Elkay Water in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zurn Elkay Water 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 Zurn Elkay. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zurn Elkay Water has no effect on the direction of CECO Environmental i.e., CECO Environmental and Zurn Elkay go up and down completely randomly.
Pair Corralation between CECO Environmental and Zurn Elkay
Given the investment horizon of 90 days CECO Environmental is expected to generate 2.33 times less return on investment than Zurn Elkay. In addition to that, CECO Environmental is 2.01 times more volatile than Zurn Elkay Water. It trades about 0.04 of its total potential returns per unit of risk. Zurn Elkay Water is currently generating about 0.19 per unit of volatility. If you would invest 3,221 in Zurn Elkay Water on August 23, 2024 and sell it today you would earn a total of 714.00 from holding Zurn Elkay Water or generate 22.17% 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. Zurn Elkay Water
Performance |
| Timeline |
| CECO Environmental Corp |
| Zurn Elkay Water |
CECO Environmental and Zurn Elkay Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CECO Environmental and Zurn Elkay
The main advantage of trading using opposite CECO Environmental and Zurn Elkay positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CECO Environmental position performs unexpectedly, Zurn Elkay 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 Zurn Elkay will offset losses from the drop in Zurn Elkay's long position.| CECO Environmental vs. Federal Signal | CECO Environmental vs. Zurn Elkay Water | CECO Environmental vs. Energy Recovery | CECO Environmental vs. 374Water Common Stock |
| Zurn Elkay vs. Energy Recovery | Zurn Elkay vs. CECO Environmental Corp | Zurn Elkay vs. 374Water Common Stock | Zurn Elkay vs. Federal Signal |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
Other Complementary Tools
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |