Correlation Between Lion One and CECO Environmental
Can any of the company-specific risk be diversified away by investing in both Lion One 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 Lion One and CECO Environmental into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lion One Metals and CECO Environmental Corp, you can compare the effects of market volatilities on Lion One 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 Lion One with a short position of CECO Environmental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lion One and CECO Environmental.
Diversification Opportunities for Lion One and CECO Environmental
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lion and CECO is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Lion One Metals 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 Lion One 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 Lion One Metals 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 Lion One i.e., Lion One and CECO Environmental go up and down completely randomly.
Pair Corralation between Lion One and CECO Environmental
Assuming the 90 days horizon Lion One Metals is expected to under-perform the CECO Environmental. In addition to that, Lion One is 1.28 times more volatile than CECO Environmental Corp. It trades about -0.04 of its total potential returns per unit of risk. CECO Environmental Corp is currently generating about 0.08 per unit of volatility. If you would invest 1,219 in CECO Environmental Corp on August 30, 2024 and sell it today you would earn a total of 1,969 from holding CECO Environmental Corp or generate 161.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lion One Metals vs. CECO Environmental Corp
Performance |
| Timeline |
| Lion One Metals |
| CECO Environmental Corp |
Lion One and CECO Environmental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lion One and CECO Environmental
The main advantage of trading using opposite Lion One and CECO Environmental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lion One 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.| Lion One vs. Silver Hammer Mining | Lion One vs. Reyna Silver Corp | Lion One vs. Guanajuato Silver | Lion One vs. Silver One Resources |
| 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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