Correlation Between CECO Environmental and Atlas Air

Can any of the company-specific risk be diversified away by investing in both CECO Environmental and Atlas Air 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 Atlas Air 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 Atlas Air Worldwide, you can compare the effects of market volatilities on CECO Environmental and Atlas Air 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 Atlas Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of CECO Environmental and Atlas Air.

Diversification Opportunities for CECO Environmental and Atlas Air

-0.19

Correlation Coefficient

CECO Environmental  Atlas Air

Good diversification

The 3 months correlation between CECO and Atlas is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding CECO Environmental Corp and Atlas Air Worldwide in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atlas Air Worldwide 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 Atlas Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atlas Air Worldwide has no effect on the direction of CECO Environmental i.e., CECO Environmental and Atlas Air go up and down completely randomly.

Pair Corralation between CECO Environmental and Atlas Air

If you would invest  2,875  in CECO Environmental Corp on October 22, 2024 and sell it today you would earn a total of  85.00  from holding CECO Environmental Corp or generate 2.96% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	5.26%
Values	Daily Returns

CECO Environmental Corp  vs.  Atlas Air Worldwide

CECO Environmental Corp

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in CECO Environmental Corp are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain fundamental indicators, CECO Environmental displayed solid returns over the last few months and may actually be approaching a breakup point.

Atlas Air Worldwide

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Atlas Air Worldwide has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Atlas Air is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with CECO Environmental and Atlas Air

The main advantage of trading using opposite CECO Environmental and Atlas Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CECO Environmental position performs unexpectedly, Atlas Air 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 Atlas Air will offset losses from the drop in Atlas Air's long position.

The idea behind CECO Environmental Corp and Atlas Air Worldwide pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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.