Correlation Between Ehang Holdings and CECO Environmental
Can any of the company-specific risk be diversified away by investing in both Ehang 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 Ehang 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 Ehang Holdings and CECO Environmental Corp, you can compare the effects of market volatilities on Ehang 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 Ehang Holdings with a short position of CECO Environmental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ehang Holdings and CECO Environmental.
Diversification Opportunities for Ehang Holdings and CECO Environmental
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Ehang and CECO is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Ehang Holdings and CECO Environmental Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CECO Environmental Corp and Ehang 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 Ehang Holdings 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 Corp has no effect on the direction of Ehang Holdings i.e., Ehang Holdings and CECO Environmental go up and down completely randomly.
Pair Corralation between Ehang Holdings and CECO Environmental
Allowing for the 90-day total investment horizon Ehang Holdings is expected to generate 2.29 times more return on investment than CECO Environmental. However, Ehang Holdings is 2.29 times more volatile than CECO Environmental Corp. It trades about 0.47 of its potential returns per unit of risk. CECO Environmental Corp is currently generating about -0.39 per unit of risk. If you would invest 1,555 in Ehang Holdings on November 18, 2024 and sell it today you would earn a total of 1,001 from holding Ehang Holdings or generate 64.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ehang Holdings vs. CECO Environmental Corp
Performance |
| Timeline |
| Ehang Holdings |
| CECO Environmental Corp |
Ehang Holdings and CECO Environmental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ehang Holdings and CECO Environmental
The main advantage of trading using opposite Ehang Holdings and CECO Environmental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ehang 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.| Ehang Holdings vs. Archer Aviation | Ehang Holdings vs. Vertical Aerospace | Ehang Holdings vs. Rocket Lab USA | Ehang Holdings vs. Lilium NV |
| CECO Environmental vs. Federal Signal | CECO Environmental vs. Zurn Elkay Water | CECO Environmental vs. Fuel Tech | CECO Environmental vs. Energy Recovery |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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