Correlation Between CECO Environmental and Aegean Airlines
Can any of the company-specific risk be diversified away by investing in both CECO Environmental and Aegean Airlines 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 Aegean Airlines 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 Aegean Airlines SA, you can compare the effects of market volatilities on CECO Environmental and Aegean Airlines 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 Aegean Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of CECO Environmental and Aegean Airlines.
Diversification Opportunities for CECO Environmental and Aegean Airlines
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CECO and Aegean is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding CECO Environmental Corp and Aegean Airlines SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aegean Airlines 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 Aegean Airlines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aegean Airlines SA has no effect on the direction of CECO Environmental i.e., CECO Environmental and Aegean Airlines go up and down completely randomly.
Pair Corralation between CECO Environmental and Aegean Airlines
Given the investment horizon of 90 days CECO Environmental Corp is expected to under-perform the Aegean Airlines. In addition to that, CECO Environmental is 1.31 times more volatile than Aegean Airlines SA. It trades about -0.1 of its total potential returns per unit of risk. Aegean Airlines SA is currently generating about 0.13 per unit of volatility. If you would invest 1,025 in Aegean Airlines SA on December 27, 2024 and sell it today you would earn a total of 170.00 from holding Aegean Airlines SA or generate 16.59% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 96.83% |
Values | Daily Returns |
CECO Environmental Corp vs. Aegean Airlines SA
Performance |
Timeline |
CECO Environmental Corp |
Aegean Airlines SA |
CECO Environmental and Aegean Airlines Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with CECO Environmental and Aegean Airlines
The main advantage of trading using opposite CECO Environmental and Aegean Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CECO Environmental position performs unexpectedly, Aegean Airlines 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 Aegean Airlines will offset losses from the drop in Aegean Airlines' long position.CECO Environmental vs. Federal Signal | CECO Environmental vs. Zurn Elkay Water | CECO Environmental vs. Fuel Tech | CECO Environmental vs. Energy Recovery |
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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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