Correlation Between CECO ENVIRONMENTAL and HMS Bergbau
Can any of the company-specific risk be diversified away by investing in both CECO ENVIRONMENTAL and HMS Bergbau 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 HMS Bergbau into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CECO ENVIRONMENTAL and HMS Bergbau AG, you can compare the effects of market volatilities on CECO ENVIRONMENTAL and HMS Bergbau 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 HMS Bergbau. Check out your portfolio center. Please also check ongoing floating volatility patterns of CECO ENVIRONMENTAL and HMS Bergbau.
Diversification Opportunities for CECO ENVIRONMENTAL and HMS Bergbau
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CECO and HMS is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding CECO ENVIRONMENTAL and HMS Bergbau AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HMS Bergbau AG 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 HMS Bergbau. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HMS Bergbau AG has no effect on the direction of CECO ENVIRONMENTAL i.e., CECO ENVIRONMENTAL and HMS Bergbau go up and down completely randomly.
Pair Corralation between CECO ENVIRONMENTAL and HMS Bergbau
Assuming the 90 days trading horizon CECO ENVIRONMENTAL is expected to under-perform the HMS Bergbau. In addition to that, CECO ENVIRONMENTAL is 5.07 times more volatile than HMS Bergbau AG. It trades about -0.11 of its total potential returns per unit of risk. HMS Bergbau AG is currently generating about 0.14 per unit of volatility. If you would invest 2,900 in HMS Bergbau AG on September 26, 2024 and sell it today you would earn a total of 40.00 from holding HMS Bergbau AG or generate 1.38% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
CECO ENVIRONMENTAL vs. HMS Bergbau AG
Performance |
Timeline |
CECO ENVIRONMENTAL |
HMS Bergbau AG |
CECO ENVIRONMENTAL and HMS Bergbau Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with CECO ENVIRONMENTAL and HMS Bergbau
The main advantage of trading using opposite CECO ENVIRONMENTAL and HMS Bergbau positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CECO ENVIRONMENTAL position performs unexpectedly, HMS Bergbau 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 HMS Bergbau will offset losses from the drop in HMS Bergbau's long position.CECO ENVIRONMENTAL vs. Playa Hotels Resorts | CECO ENVIRONMENTAL vs. KOOL2PLAY SA ZY | CECO ENVIRONMENTAL vs. Computershare Limited | CECO ENVIRONMENTAL vs. COLUMBIA SPORTSWEAR |
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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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