Correlation Between CECO Environmental and SolarBank

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

Diversification Opportunities for CECO Environmental and SolarBank

0.0

Correlation Coefficient

CECO Environmental  SolarBank

Pay attention - limited upside

The 3 months correlation between CECO and SolarBank is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding CECO Environmental Corp and SolarBank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SolarBank 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 SolarBank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SolarBank has no effect on the direction of CECO Environmental i.e., CECO Environmental and SolarBank go up and down completely randomly.

Pair Corralation between CECO Environmental and SolarBank

If you would invest (100.00) in SolarBank on December 29, 2024 and sell it today you would earn a total of  100.00  from holding SolarBank 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.  SolarBank

CECO Environmental Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days CECO Environmental Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's fundamental indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

SolarBank

Risk-Adjusted Performance

Very Weak

Over the last 90 days SolarBank has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental indicators, SolarBank is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with CECO Environmental and SolarBank

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

The idea behind CECO Environmental Corp and SolarBank 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.

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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.