Correlation Between AOI Electronics and CECO ENVIRONMENTAL
Can any of the company-specific risk be diversified away by investing in both AOI Electronics 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 AOI Electronics and CECO ENVIRONMENTAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AOI Electronics Co and CECO ENVIRONMENTAL, you can compare the effects of market volatilities on AOI Electronics 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 AOI Electronics with a short position of CECO ENVIRONMENTAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of AOI Electronics and CECO ENVIRONMENTAL.
Diversification Opportunities for AOI Electronics and CECO ENVIRONMENTAL
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between AOI and CECO is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding AOI Electronics Co and CECO ENVIRONMENTAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CECO ENVIRONMENTAL and AOI Electronics 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 AOI Electronics Co 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 AOI Electronics i.e., AOI Electronics and CECO ENVIRONMENTAL go up and down completely randomly.
Pair Corralation between AOI Electronics and CECO ENVIRONMENTAL
If you would invest 2,426 in CECO ENVIRONMENTAL on August 28, 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 | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AOI Electronics Co vs. CECO ENVIRONMENTAL
Performance |
| Timeline |
| AOI Electronics |
| CECO ENVIRONMENTAL |
AOI Electronics and CECO ENVIRONMENTAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AOI Electronics and CECO ENVIRONMENTAL
The main advantage of trading using opposite AOI Electronics and CECO ENVIRONMENTAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AOI Electronics 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.| AOI Electronics vs. Universal Display | AOI Electronics vs. Entravision Communications | AOI Electronics vs. Spirent Communications plc | AOI Electronics vs. Internet Thailand PCL |
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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 Global Correlations module to find global opportunities by holding instruments from different markets.
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