Correlation Between EHEALTH and CECO ENVIRONMENTAL
Can any of the company-specific risk be diversified away by investing in both EHEALTH 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 EHEALTH and CECO ENVIRONMENTAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EHEALTH and CECO ENVIRONMENTAL, you can compare the effects of market volatilities on EHEALTH 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 EHEALTH with a short position of CECO ENVIRONMENTAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of EHEALTH and CECO ENVIRONMENTAL.
Diversification Opportunities for EHEALTH and CECO ENVIRONMENTAL
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between EHEALTH and CECO is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding EHEALTH and CECO ENVIRONMENTAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CECO ENVIRONMENTAL and EHEALTH 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 EHEALTH 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 EHEALTH i.e., EHEALTH and CECO ENVIRONMENTAL go up and down completely randomly.
Pair Corralation between EHEALTH and CECO ENVIRONMENTAL
Assuming the 90 days trading horizon EHEALTH is expected to generate 4.19 times less return on investment than CECO ENVIRONMENTAL. In addition to that, EHEALTH is 1.33 times more volatile than CECO ENVIRONMENTAL. It trades about 0.02 of its total potential returns per unit of risk. CECO ENVIRONMENTAL is currently generating about 0.09 per unit of volatility. If you would invest 2,220 in CECO ENVIRONMENTAL on September 2, 2024 and sell it today you would earn a total of 778.00 from holding CECO ENVIRONMENTAL or generate 35.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
EHEALTH vs. CECO ENVIRONMENTAL
Performance |
| Timeline |
| EHEALTH |
| CECO ENVIRONMENTAL |
EHEALTH and CECO ENVIRONMENTAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EHEALTH and CECO ENVIRONMENTAL
The main advantage of trading using opposite EHEALTH and CECO ENVIRONMENTAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EHEALTH 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.| EHEALTH vs. SIVERS SEMICONDUCTORS AB | EHEALTH vs. Darden Restaurants | EHEALTH vs. Reliance Steel Aluminum | EHEALTH vs. Q2M Managementberatung AG |
| CECO ENVIRONMENTAL vs. Automatic Data Processing | CECO ENVIRONMENTAL vs. TIANDE CHEMICAL | CECO ENVIRONMENTAL vs. Soken Chemical Engineering | CECO ENVIRONMENTAL vs. Nucletron Electronic Aktiengesellschaft |
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 CEOs Directory module to screen CEOs from public companies around the world.
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