Correlation Between CECO ENVIRONMENTAL and KENEDIX OFFICE
Can any of the company-specific risk be diversified away by investing in both CECO ENVIRONMENTAL and KENEDIX OFFICE 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 KENEDIX OFFICE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CECO ENVIRONMENTAL and KENEDIX OFFICE INV, you can compare the effects of market volatilities on CECO ENVIRONMENTAL and KENEDIX OFFICE 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 KENEDIX OFFICE. Check out your portfolio center. Please also check ongoing floating volatility patterns of CECO ENVIRONMENTAL and KENEDIX OFFICE.
Diversification Opportunities for CECO ENVIRONMENTAL and KENEDIX OFFICE
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between CECO and KENEDIX is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding CECO ENVIRONMENTAL and KENEDIX OFFICE INV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KENEDIX OFFICE INV 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 KENEDIX OFFICE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KENEDIX OFFICE INV has no effect on the direction of CECO ENVIRONMENTAL i.e., CECO ENVIRONMENTAL and KENEDIX OFFICE go up and down completely randomly.
Pair Corralation between CECO ENVIRONMENTAL and KENEDIX OFFICE
Assuming the 90 days trading horizon CECO ENVIRONMENTAL is expected to under-perform the KENEDIX OFFICE. In addition to that, CECO ENVIRONMENTAL is 1.44 times more volatile than KENEDIX OFFICE INV. It trades about -0.29 of its total potential returns per unit of risk. KENEDIX OFFICE INV is currently generating about -0.08 per unit of volatility. If you would invest 93,000 in KENEDIX OFFICE INV on December 11, 2024 and sell it today you would lose (4,000) from holding KENEDIX OFFICE INV or give up 4.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CECO ENVIRONMENTAL vs. KENEDIX OFFICE INV
Performance |
| Timeline |
| CECO ENVIRONMENTAL |
| KENEDIX OFFICE INV |
CECO ENVIRONMENTAL and KENEDIX OFFICE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CECO ENVIRONMENTAL and KENEDIX OFFICE
The main advantage of trading using opposite CECO ENVIRONMENTAL and KENEDIX OFFICE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CECO ENVIRONMENTAL position performs unexpectedly, KENEDIX OFFICE 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 KENEDIX OFFICE will offset losses from the drop in KENEDIX OFFICE's long position.| CECO ENVIRONMENTAL vs. FUYO GENERAL LEASE | CECO ENVIRONMENTAL vs. JAPAN TOBACCO UNSPADR12 | CECO ENVIRONMENTAL vs. GRENKELEASING Dusseldorf | CECO ENVIRONMENTAL vs. IMPERIAL TOBACCO |
| KENEDIX OFFICE vs. Apple Inc | KENEDIX OFFICE vs. Apple Inc | KENEDIX OFFICE vs. Apple Inc | KENEDIX OFFICE vs. Apple Inc |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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