Correlation Between CECO Environmental and Umicore SA
Can any of the company-specific risk be diversified away by investing in both CECO Environmental and Umicore SA 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 Umicore SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CECO Environmental Corp and Umicore SA, you can compare the effects of market volatilities on CECO Environmental and Umicore SA 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 Umicore SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of CECO Environmental and Umicore SA.
Diversification Opportunities for CECO Environmental and Umicore SA
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between CECO and Umicore is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding CECO Environmental Corp and Umicore SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Umicore SA 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 Corp are associated (or correlated) with Umicore SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Umicore SA has no effect on the direction of CECO Environmental i.e., CECO Environmental and Umicore SA go up and down completely randomly.
Pair Corralation between CECO Environmental and Umicore SA
If you would invest (100.00) in CECO Environmental Corp on January 26, 2024 and sell it today you would earn a total of 100.00 from holding CECO Environmental Corp or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
CECO Environmental Corp vs. Umicore SA
Performance |
| Timeline |
| CECO Environmental Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Umicore SA |
CECO Environmental and Umicore SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CECO Environmental and Umicore SA
The main advantage of trading using opposite CECO Environmental and Umicore SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CECO Environmental position performs unexpectedly, Umicore SA 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 Umicore SA will offset losses from the drop in Umicore SA's long position.| CECO Environmental vs. Cimpress NV | CECO Environmental vs. Universal Music Group | CECO Environmental vs. Townsquare Media | CECO Environmental vs. Zoom Video Communications |
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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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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