Correlation Between CECO ENVIRONMENTAL and Apple
Can any of the company-specific risk be diversified away by investing in both CECO ENVIRONMENTAL and Apple 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 Apple into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CECO ENVIRONMENTAL and Apple Inc, you can compare the effects of market volatilities on CECO ENVIRONMENTAL and Apple 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 Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of CECO ENVIRONMENTAL and Apple.
Diversification Opportunities for CECO ENVIRONMENTAL and Apple
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CECO and Apple is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding CECO ENVIRONMENTAL and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc 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 Apple. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apple Inc has no effect on the direction of CECO ENVIRONMENTAL i.e., CECO ENVIRONMENTAL and Apple go up and down completely randomly.
Pair Corralation between CECO ENVIRONMENTAL and Apple
Assuming the 90 days trading horizon CECO ENVIRONMENTAL is expected to generate 2.63 times more return on investment than Apple. However, CECO ENVIRONMENTAL is 2.63 times more volatile than Apple Inc. It trades about 0.55 of its potential returns per unit of risk. Apple Inc is currently generating about 0.09 per unit of risk. If you would invest 1,955 in CECO ENVIRONMENTAL on August 30, 2024 and sell it today you would earn a total of 1,059 from holding CECO ENVIRONMENTAL or generate 54.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CECO ENVIRONMENTAL vs. Apple Inc
Performance |
| Timeline |
| CECO ENVIRONMENTAL |
| Apple Inc |
CECO ENVIRONMENTAL and Apple Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CECO ENVIRONMENTAL and Apple
The main advantage of trading using opposite CECO ENVIRONMENTAL and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CECO ENVIRONMENTAL position performs unexpectedly, Apple 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 Apple will offset losses from the drop in Apple's long position.| CECO ENVIRONMENTAL vs. Apple Inc | CECO ENVIRONMENTAL vs. Apple Inc | CECO ENVIRONMENTAL vs. Superior Plus Corp | CECO ENVIRONMENTAL vs. SIVERS SEMICONDUCTORS AB |
| Apple vs. CECO ENVIRONMENTAL | Apple vs. NIPPON STEEL SPADR | Apple vs. QURATE RETAIL INC | Apple vs. Boiron SA |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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