Correlation Between CECO ENVIRONMENTAL and G III
Can any of the company-specific risk be diversified away by investing in both CECO ENVIRONMENTAL and G III 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 G III into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CECO ENVIRONMENTAL and G III APPAREL GROUP, you can compare the effects of market volatilities on CECO ENVIRONMENTAL and G III 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 G III. Check out your portfolio center. Please also check ongoing floating volatility patterns of CECO ENVIRONMENTAL and G III.
Diversification Opportunities for CECO ENVIRONMENTAL and G III
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between CECO and GI4 is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding CECO ENVIRONMENTAL and G III APPAREL GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on G III APPAREL 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 G III. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of G III APPAREL has no effect on the direction of CECO ENVIRONMENTAL i.e., CECO ENVIRONMENTAL and G III go up and down completely randomly.
Pair Corralation between CECO ENVIRONMENTAL and G III
Assuming the 90 days trading horizon CECO ENVIRONMENTAL is expected to generate 1.71 times more return on investment than G III. However, CECO ENVIRONMENTAL is 1.71 times more volatile than G III APPAREL GROUP. It trades about 0.14 of its potential returns per unit of risk. G III APPAREL GROUP is currently generating about 0.07 per unit of risk. If you would invest 2,448 in CECO ENVIRONMENTAL on September 12, 2024 and sell it today you would earn a total of 830.00 from holding CECO ENVIRONMENTAL or generate 33.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.46% |
| Values | Daily Returns |
CECO ENVIRONMENTAL vs. G III APPAREL GROUP
Performance |
| Timeline |
| CECO ENVIRONMENTAL |
| G III APPAREL |
CECO ENVIRONMENTAL and G III Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CECO ENVIRONMENTAL and G III
The main advantage of trading using opposite CECO ENVIRONMENTAL and G III positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CECO ENVIRONMENTAL position performs unexpectedly, G III 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 G III will offset losses from the drop in G III's long position.| CECO ENVIRONMENTAL vs. Apple Inc | CECO ENVIRONMENTAL vs. Apple Inc | CECO ENVIRONMENTAL vs. Apple Inc | CECO ENVIRONMENTAL vs. Apple Inc |
| G III vs. United Insurance Holdings | G III vs. HANOVER INSURANCE | G III vs. REVO INSURANCE SPA | G III vs. Compagnie Plastic Omnium |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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