Correlation Between Dongguan Chitwing and CECO Environmental

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Can any of the company-specific risk be diversified away by investing in both Dongguan Chitwing and CECO Environmental 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 Dongguan Chitwing and CECO Environmental into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dongguan Chitwing Technology and CECO Environmental Corp, you can compare the effects of market volatilities on Dongguan Chitwing and CECO Environmental 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 Dongguan Chitwing with a short position of CECO Environmental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongguan Chitwing and CECO Environmental.

Diversification Opportunities for Dongguan Chitwing and CECO Environmental

-0.12
  Correlation Coefficient

Good diversification

The 3 months correlation between Dongguan and CECO is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Dongguan Chitwing Technology and CECO Environmental Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CECO Environmental Corp and Dongguan Chitwing 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 Dongguan Chitwing Technology are associated (or correlated) with CECO Environmental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CECO Environmental Corp has no effect on the direction of Dongguan Chitwing i.e., Dongguan Chitwing and CECO Environmental go up and down completely randomly.

Pair Corralation between Dongguan Chitwing and CECO Environmental

Assuming the 90 days trading horizon Dongguan Chitwing is expected to generate 5.59 times less return on investment than CECO Environmental. But when comparing it to its historical volatility, Dongguan Chitwing Technology is 1.35 times less risky than CECO Environmental. It trades about 0.03 of its potential returns per unit of risk. CECO Environmental Corp is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  4,528  in CECO Environmental Corp on September 9, 2025 and sell it today you would earn a total of  965.00  from holding CECO Environmental Corp or generate 21.31% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy90.77%
ValuesDaily Returns

Dongguan Chitwing Technology  vs.  CECO Environmental Corp

 Performance 
       Timeline  
Dongguan Chitwing 

Risk-Adjusted Performance

Weak

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Dongguan Chitwing Technology are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Dongguan Chitwing is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
CECO Environmental Corp 

Risk-Adjusted Performance

Fair

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in CECO Environmental Corp are ranked lower than 8 (%) 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.

Dongguan Chitwing and CECO Environmental Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Dongguan Chitwing and CECO Environmental

The main advantage of trading using opposite Dongguan Chitwing and CECO Environmental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongguan Chitwing position performs unexpectedly, CECO Environmental 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 CECO Environmental will offset losses from the drop in CECO Environmental's long position.
The idea behind Dongguan Chitwing Technology and CECO Environmental Corp 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.

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