Correlation Between CosmoSteel Holdings and CECO ENVIRONMENTAL
Can any of the company-specific risk be diversified away by investing in both CosmoSteel Holdings and CECO ENVIRONMENTAL 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 CosmoSteel Holdings and CECO ENVIRONMENTAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CosmoSteel Holdings Limited and CECO ENVIRONMENTAL, you can compare the effects of market volatilities on CosmoSteel Holdings and CECO ENVIRONMENTAL 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 CosmoSteel Holdings with a short position of CECO ENVIRONMENTAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of CosmoSteel Holdings and CECO ENVIRONMENTAL.
Diversification Opportunities for CosmoSteel Holdings and CECO ENVIRONMENTAL
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between CosmoSteel and CECO is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding CosmoSteel Holdings Limited and CECO ENVIRONMENTAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CECO ENVIRONMENTAL and CosmoSteel Holdings 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 CosmoSteel Holdings Limited are associated (or correlated) with CECO ENVIRONMENTAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CECO ENVIRONMENTAL has no effect on the direction of CosmoSteel Holdings i.e., CosmoSteel Holdings and CECO ENVIRONMENTAL go up and down completely randomly.
Pair Corralation between CosmoSteel Holdings and CECO ENVIRONMENTAL
Assuming the 90 days horizon CosmoSteel Holdings is expected to generate 19.47 times less return on investment than CECO ENVIRONMENTAL. But when comparing it to its historical volatility, CosmoSteel Holdings Limited is 2.85 times less risky than CECO ENVIRONMENTAL. It trades about 0.03 of its potential returns per unit of risk. CECO ENVIRONMENTAL is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 2,426 in CECO ENVIRONMENTAL on August 27, 2024 and sell it today you would earn a total of 558.00 from holding CECO ENVIRONMENTAL or generate 23.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CosmoSteel Holdings Limited vs. CECO ENVIRONMENTAL
Performance |
| Timeline |
| CosmoSteel Holdings |
| CECO ENVIRONMENTAL |
CosmoSteel Holdings and CECO ENVIRONMENTAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CosmoSteel Holdings and CECO ENVIRONMENTAL
The main advantage of trading using opposite CosmoSteel Holdings and CECO ENVIRONMENTAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CosmoSteel Holdings position performs unexpectedly, CECO ENVIRONMENTAL 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 CECO ENVIRONMENTAL will offset losses from the drop in CECO ENVIRONMENTAL's long position.| CosmoSteel Holdings vs. Superior Plus Corp | CosmoSteel Holdings vs. NMI Holdings | CosmoSteel Holdings vs. Origin Agritech | CosmoSteel Holdings vs. SIVERS SEMICONDUCTORS AB |
| CECO ENVIRONMENTAL vs. Sqs Software Quality | CECO ENVIRONMENTAL vs. National Beverage Corp | CECO ENVIRONMENTAL vs. Constellation Software | CECO ENVIRONMENTAL vs. AOI Electronics Co |
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.
Other Complementary Tools
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios |