Correlation Between CECO Environmental and Hertz Global
Can any of the company-specific risk be diversified away by investing in both CECO Environmental and Hertz Global 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 Hertz Global 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 Hertz Global Holdings, you can compare the effects of market volatilities on CECO Environmental and Hertz Global 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 Hertz Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of CECO Environmental and Hertz Global.
Diversification Opportunities for CECO Environmental and Hertz Global
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between CECO and Hertz is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding CECO Environmental Corp and Hertz Global Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hertz Global Holdings 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 Hertz Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hertz Global Holdings has no effect on the direction of CECO Environmental i.e., CECO Environmental and Hertz Global go up and down completely randomly.
Pair Corralation between CECO Environmental and Hertz Global
Given the investment horizon of 90 days CECO Environmental is expected to generate 1.31 times less return on investment than Hertz Global. But when comparing it to its historical volatility, CECO Environmental Corp is 1.87 times less risky than Hertz Global. It trades about 0.1 of its potential returns per unit of risk. Hertz Global Holdings is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 538.00 in Hertz Global Holdings on August 13, 2025 and sell it today you would earn a total of 90.00 from holding Hertz Global Holdings or generate 16.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CECO Environmental Corp vs. Hertz Global Holdings
Performance |
| Timeline |
| CECO Environmental Corp |
| Hertz Global Holdings |
CECO Environmental and Hertz Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CECO Environmental and Hertz Global
The main advantage of trading using opposite CECO Environmental and Hertz Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CECO Environmental position performs unexpectedly, Hertz Global 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 Hertz Global will offset losses from the drop in Hertz Global's long position.| CECO Environmental vs. Purecycle Technologies Holdings | CECO Environmental vs. V2X Inc | CECO Environmental vs. Steelcase | CECO Environmental vs. Helios Technologies |
| Hertz Global vs. Triton International Limited | Hertz Global vs. Custom Truck One | Hertz Global vs. JetBlue Airways Corp | Hertz Global vs. ManpowerGroup |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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