Correlation Between Yanlord Land and CECO Environmental

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

By analyzing existing cross correlation between Yanlord Land Group and CECO Environmental Corp, you can compare the effects of market volatilities on Yanlord Land 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 Yanlord Land with a short position of CECO Environmental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yanlord Land and CECO Environmental.

Diversification Opportunities for Yanlord Land and CECO Environmental

0.01

Correlation Coefficient

Yanlord Land  CECO Environmental

Significant diversification

The 3 months correlation between Yanlord and CECO is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Yanlord Land Group 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 Yanlord Land 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 Yanlord Land Group 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 Yanlord Land i.e., Yanlord Land and CECO Environmental go up and down completely randomly.

Pair Corralation between Yanlord Land and CECO Environmental

If you would invest  2,511  in CECO Environmental Corp on September 13, 2024 and sell it today you would earn a total of  869.50  from holding CECO Environmental Corp or generate 34.63% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

Yanlord Land Group  vs.  CECO Environmental Corp

Yanlord Land Group

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Yanlord Land Group are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly conflicting technical and fundamental indicators, Yanlord Land showed solid returns over the last few months and may actually be approaching a breakup point.

CECO Environmental Corp

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CECO Environmental Corp are ranked lower than 9 (%) 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.

Pair Trading with Yanlord Land and CECO Environmental

The main advantage of trading using opposite Yanlord Land and CECO Environmental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yanlord Land 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 Yanlord Land Group 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.