Correlation Between CECO ENVIRONMENTAL and Genco Shipping
Can any of the company-specific risk be diversified away by investing in both CECO ENVIRONMENTAL and Genco Shipping 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 Genco Shipping into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CECO ENVIRONMENTAL and Genco Shipping Trading, you can compare the effects of market volatilities on CECO ENVIRONMENTAL and Genco Shipping 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 Genco Shipping. Check out your portfolio center. Please also check ongoing floating volatility patterns of CECO ENVIRONMENTAL and Genco Shipping.
Diversification Opportunities for CECO ENVIRONMENTAL and Genco Shipping
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CECO and Genco is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding CECO ENVIRONMENTAL and Genco Shipping Trading in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genco Shipping Trading 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 Genco Shipping. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genco Shipping Trading has no effect on the direction of CECO ENVIRONMENTAL i.e., CECO ENVIRONMENTAL and Genco Shipping go up and down completely randomly.
Pair Corralation between CECO ENVIRONMENTAL and Genco Shipping
Assuming the 90 days trading horizon CECO ENVIRONMENTAL is expected to generate 1.37 times more return on investment than Genco Shipping. However, CECO ENVIRONMENTAL is 1.37 times more volatile than Genco Shipping Trading. It trades about 0.08 of its potential returns per unit of risk. Genco Shipping Trading is currently generating about 0.05 per unit of risk. If you would invest 1,790 in CECO ENVIRONMENTAL on September 2, 2024 and sell it today you would earn a total of 1,208 from holding CECO ENVIRONMENTAL or generate 67.49% 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. Genco Shipping Trading
Performance |
| Timeline |
| CECO ENVIRONMENTAL |
| Genco Shipping Trading |
CECO ENVIRONMENTAL and Genco Shipping Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CECO ENVIRONMENTAL and Genco Shipping
The main advantage of trading using opposite CECO ENVIRONMENTAL and Genco Shipping positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CECO ENVIRONMENTAL position performs unexpectedly, Genco Shipping 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 Genco Shipping will offset losses from the drop in Genco Shipping's long position.| CECO ENVIRONMENTAL vs. Automatic Data Processing | CECO ENVIRONMENTAL vs. TIANDE CHEMICAL | CECO ENVIRONMENTAL vs. Soken Chemical Engineering | CECO ENVIRONMENTAL vs. Nucletron Electronic Aktiengesellschaft |
| Genco Shipping vs. MGIC INVESTMENT | Genco Shipping vs. Apollo Investment Corp | Genco Shipping vs. KAUFMAN ET BROAD | Genco Shipping vs. Transportadora de Gas |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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