Correlation Between CECO Environmental and Blend Labs
Can any of the company-specific risk be diversified away by investing in both CECO Environmental and Blend Labs 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 Blend Labs 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 Blend Labs, you can compare the effects of market volatilities on CECO Environmental and Blend Labs 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 Blend Labs. Check out your portfolio center. Please also check ongoing floating volatility patterns of CECO Environmental and Blend Labs.
Diversification Opportunities for CECO Environmental and Blend Labs
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CECO and Blend is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding CECO Environmental Corp and Blend Labs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blend Labs 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 Blend Labs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blend Labs has no effect on the direction of CECO Environmental i.e., CECO Environmental and Blend Labs go up and down completely randomly.
Pair Corralation between CECO Environmental and Blend Labs
Given the investment horizon of 90 days CECO Environmental Corp is expected to generate 0.69 times more return on investment than Blend Labs. However, CECO Environmental Corp is 1.45 times less risky than Blend Labs. It trades about 0.28 of its potential returns per unit of risk. Blend Labs is currently generating about 0.02 per unit of risk. If you would invest 2,734 in CECO Environmental Corp on May 29, 2025 and sell it today you would earn a total of 1,941 from holding CECO Environmental Corp or generate 70.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CECO Environmental Corp vs. Blend Labs
Performance |
| Timeline |
| CECO Environmental Corp |
| Blend Labs |
CECO Environmental and Blend Labs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CECO Environmental and Blend Labs
The main advantage of trading using opposite CECO Environmental and Blend Labs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CECO Environmental position performs unexpectedly, Blend Labs 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 Blend Labs will offset losses from the drop in Blend Labs' long position.| CECO Environmental vs. Energy Recovery | CECO Environmental vs. Federal Signal | CECO Environmental vs. Zurn Elkay Water | CECO Environmental vs. 374Water Common Stock |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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