Correlation Between CECO ENVIRONMENTAL and Korn Ferry

Can any of the company-specific risk be diversified away by investing in both CECO ENVIRONMENTAL and Korn Ferry 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 Korn Ferry into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CECO ENVIRONMENTAL and Korn Ferry, you can compare the effects of market volatilities on CECO ENVIRONMENTAL and Korn Ferry 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 Korn Ferry. Check out your portfolio center. Please also check ongoing floating volatility patterns of CECO ENVIRONMENTAL and Korn Ferry.

Diversification Opportunities for CECO ENVIRONMENTAL and Korn Ferry

0.5

Correlation Coefficient

CECO ENVIRONMENTAL  Korn Ferry

Very weak diversification

The 3 months correlation between CECO and Korn is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding CECO ENVIRONMENTAL and Korn Ferry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korn Ferry 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 Korn Ferry. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korn Ferry has no effect on the direction of CECO ENVIRONMENTAL i.e., CECO ENVIRONMENTAL and Korn Ferry go up and down completely randomly.

Pair Corralation between CECO ENVIRONMENTAL and Korn Ferry

Assuming the 90 days trading horizon CECO ENVIRONMENTAL is expected to generate 1.63 times more return on investment than Korn Ferry. However, CECO ENVIRONMENTAL is 1.63 times more volatile than Korn Ferry. It trades about 0.07 of its potential returns per unit of risk. Korn Ferry is currently generating about 0.03 per unit of risk. If you would invest  2,586  in CECO ENVIRONMENTAL on September 19, 2024 and sell it today you would earn a total of  368.00  from holding CECO ENVIRONMENTAL or generate 14.23% 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.  Korn Ferry

CECO ENVIRONMENTAL

Risk-Adjusted Performance

5 of 100

OK

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

Korn Ferry

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Korn Ferry are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Korn Ferry is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with CECO ENVIRONMENTAL and Korn Ferry

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

The idea behind CECO ENVIRONMENTAL and Korn Ferry 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.