Correlation Between CECO ENVIRONMENTAL and Gaztransport Technigaz
Can any of the company-specific risk be diversified away by investing in both CECO ENVIRONMENTAL and Gaztransport Technigaz 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 CECO ENVIRONMENTAL and Gaztransport Technigaz into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CECO ENVIRONMENTAL and Gaztransport Technigaz SA, you can compare the effects of market volatilities on CECO ENVIRONMENTAL and Gaztransport Technigaz 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 CECO ENVIRONMENTAL with a short position of Gaztransport Technigaz. Check out your portfolio center. Please also check ongoing floating volatility patterns of CECO ENVIRONMENTAL and Gaztransport Technigaz.
Diversification Opportunities for CECO ENVIRONMENTAL and Gaztransport Technigaz
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between CECO and Gaztransport is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding CECO ENVIRONMENTAL and Gaztransport Technigaz SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gaztransport Technigaz and CECO ENVIRONMENTAL 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 CECO ENVIRONMENTAL are associated (or correlated) with Gaztransport Technigaz. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gaztransport Technigaz has no effect on the direction of CECO ENVIRONMENTAL i.e., CECO ENVIRONMENTAL and Gaztransport Technigaz go up and down completely randomly.
Pair Corralation between CECO ENVIRONMENTAL and Gaztransport Technigaz
Assuming the 90 days trading horizon CECO ENVIRONMENTAL is expected to generate 1.83 times more return on investment than Gaztransport Technigaz. However, CECO ENVIRONMENTAL is 1.83 times more volatile than Gaztransport Technigaz SA. It trades about 0.04 of its potential returns per unit of risk. Gaztransport Technigaz SA is currently generating about 0.03 per unit of risk. If you would invest 2,590 in CECO ENVIRONMENTAL on September 29, 2024 and sell it today you would earn a total of 210.00 from holding CECO ENVIRONMENTAL or generate 8.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CECO ENVIRONMENTAL vs. Gaztransport Technigaz SA
Performance |
| Timeline |
| CECO ENVIRONMENTAL |
| Gaztransport Technigaz |
CECO ENVIRONMENTAL and Gaztransport Technigaz Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CECO ENVIRONMENTAL and Gaztransport Technigaz
The main advantage of trading using opposite CECO ENVIRONMENTAL and Gaztransport Technigaz positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CECO ENVIRONMENTAL position performs unexpectedly, Gaztransport Technigaz 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 Gaztransport Technigaz will offset losses from the drop in Gaztransport Technigaz's long position.| CECO ENVIRONMENTAL vs. Iridium Communications | CECO ENVIRONMENTAL vs. Computer And Technologies | CECO ENVIRONMENTAL vs. Computershare Limited | CECO ENVIRONMENTAL vs. National Health Investors |
| Gaztransport Technigaz vs. Halliburton | Gaztransport Technigaz vs. Baker Hughes Co | Gaztransport Technigaz vs. Tenaris SA | Gaztransport Technigaz vs. China Oilfield Services |
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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