Correlation Between SINGAPORE POST and CECO ENVIRONMENTAL
Can any of the company-specific risk be diversified away by investing in both SINGAPORE POST 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 SINGAPORE POST and CECO ENVIRONMENTAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SINGAPORE POST and CECO ENVIRONMENTAL, you can compare the effects of market volatilities on SINGAPORE POST 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 SINGAPORE POST with a short position of CECO ENVIRONMENTAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of SINGAPORE POST and CECO ENVIRONMENTAL.
Diversification Opportunities for SINGAPORE POST and CECO ENVIRONMENTAL
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between SINGAPORE and CECO is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding SINGAPORE POST and CECO ENVIRONMENTAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CECO ENVIRONMENTAL and SINGAPORE POST 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 SINGAPORE POST 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 SINGAPORE POST i.e., SINGAPORE POST and CECO ENVIRONMENTAL go up and down completely randomly.
Pair Corralation between SINGAPORE POST and CECO ENVIRONMENTAL
Assuming the 90 days trading horizon SINGAPORE POST is expected to generate 0.24 times more return on investment than CECO ENVIRONMENTAL. However, SINGAPORE POST is 4.16 times less risky than CECO ENVIRONMENTAL. It trades about 0.21 of its potential returns per unit of risk. CECO ENVIRONMENTAL is currently generating about -0.46 per unit of risk. If you would invest 39.00 in SINGAPORE POST on November 28, 2024 and sell it today you would earn a total of 1.00 from holding SINGAPORE POST or generate 2.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SINGAPORE POST vs. CECO ENVIRONMENTAL
Performance |
| Timeline |
| SINGAPORE POST |
| CECO ENVIRONMENTAL |
SINGAPORE POST and CECO ENVIRONMENTAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SINGAPORE POST and CECO ENVIRONMENTAL
The main advantage of trading using opposite SINGAPORE POST and CECO ENVIRONMENTAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SINGAPORE POST 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.| SINGAPORE POST vs. OFFICE DEPOT | SINGAPORE POST vs. CITIC Telecom International | SINGAPORE POST vs. Chengdu PUTIAN Telecommunications | SINGAPORE POST vs. CHINA TELECOM H |
| CECO ENVIRONMENTAL vs. Methode Electronics | CECO ENVIRONMENTAL vs. Casio Computer CoLtd | CECO ENVIRONMENTAL vs. Take Two Interactive Software | CECO ENVIRONMENTAL vs. FANDIFI TECHNOLOGY P |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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