Correlation Between SunOpta and CECO Environmental
Can any of the company-specific risk be diversified away by investing in both SunOpta 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 SunOpta and CECO Environmental into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SunOpta and CECO Environmental Corp, you can compare the effects of market volatilities on SunOpta 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 SunOpta with a short position of CECO Environmental. Check out your portfolio center. Please also check ongoing floating volatility patterns of SunOpta and CECO Environmental.
Diversification Opportunities for SunOpta and CECO Environmental
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SunOpta and CECO is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding SunOpta 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 SunOpta 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 SunOpta 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 SunOpta i.e., SunOpta and CECO Environmental go up and down completely randomly.
Pair Corralation between SunOpta and CECO Environmental
Given the investment horizon of 90 days SunOpta is expected to under-perform the CECO Environmental. But the stock apears to be less risky and, when comparing its historical volatility, SunOpta is 1.58 times less risky than CECO Environmental. The stock trades about -0.17 of its potential returns per unit of risk. The CECO Environmental Corp is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 2,875 in CECO Environmental Corp on October 22, 2024 and sell it today you would earn a total of 85.00 from holding CECO Environmental Corp or generate 2.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SunOpta vs. CECO Environmental Corp
Performance |
| Timeline |
| SunOpta |
| CECO Environmental Corp |
SunOpta and CECO Environmental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SunOpta and CECO Environmental
The main advantage of trading using opposite SunOpta and CECO Environmental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SunOpta 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.| SunOpta vs. Seneca Foods Corp | SunOpta vs. Central Garden Pet | SunOpta vs. Central Garden Pet | SunOpta vs. Natures Sunshine Products |
| 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.
Other Complementary Tools
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities |