Correlation Between ICC Holdings and CECO Environmental
Can any of the company-specific risk be diversified away by investing in both ICC 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 ICC 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 ICC Holdings and CECO Environmental Corp, you can compare the effects of market volatilities on ICC 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 ICC Holdings with a short position of CECO Environmental. Check out your portfolio center. Please also check ongoing floating volatility patterns of ICC Holdings and CECO Environmental.
Diversification Opportunities for ICC Holdings and CECO Environmental
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ICC and CECO is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding ICC 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 ICC 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 ICC 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 ICC Holdings i.e., ICC Holdings and CECO Environmental go up and down completely randomly.
Pair Corralation between ICC Holdings and CECO Environmental
Given the investment horizon of 90 days ICC Holdings is expected to generate 22.35 times more return on investment than CECO Environmental. However, ICC Holdings is 22.35 times more volatile than CECO Environmental Corp. It trades about 0.06 of its potential returns per unit of risk. CECO Environmental Corp is currently generating about 0.09 per unit of risk. If you would invest 1,610 in ICC Holdings on August 25, 2024 and sell it today you would earn a total of 714.00 from holding ICC Holdings or generate 44.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 76.55% |
| Values | Daily Returns |
ICC Holdings vs. CECO Environmental Corp
Performance |
| Timeline |
| ICC Holdings |
| CECO Environmental Corp |
ICC Holdings and CECO Environmental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ICC Holdings and CECO Environmental
The main advantage of trading using opposite ICC Holdings and CECO Environmental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ICC 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.| ICC Holdings vs. Employers Holdings | ICC Holdings vs. AMERISAFE | ICC Holdings vs. NMI Holdings | ICC Holdings vs. Investors Title |
| CECO Environmental vs. China Natural Resources | CECO Environmental vs. Seychelle Environmtl | CECO Environmental vs. Vow ASA | CECO Environmental vs. Eestech |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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