Correlation Between FuelCell Energy and Ion Beam
Can any of the company-specific risk be diversified away by investing in both FuelCell Energy and Ion Beam 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 FuelCell Energy and Ion Beam into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FuelCell Energy and Ion Beam Applications, you can compare the effects of market volatilities on FuelCell Energy and Ion Beam 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 FuelCell Energy with a short position of Ion Beam. Check out your portfolio center. Please also check ongoing floating volatility patterns of FuelCell Energy and Ion Beam.
Diversification Opportunities for FuelCell Energy and Ion Beam
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between FuelCell and Ion is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding FuelCell Energy and Ion Beam Applications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ion Beam Applications and FuelCell Energy 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 FuelCell Energy are associated (or correlated) with Ion Beam. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ion Beam Applications has no effect on the direction of FuelCell Energy i.e., FuelCell Energy and Ion Beam go up and down completely randomly.
Pair Corralation between FuelCell Energy and Ion Beam
Assuming the 90 days trading horizon FuelCell Energy is expected to generate 4.82 times more return on investment than Ion Beam. However, FuelCell Energy is 4.82 times more volatile than Ion Beam Applications. It trades about 0.1 of its potential returns per unit of risk. Ion Beam Applications is currently generating about 0.07 per unit of risk. If you would invest 1,050 in FuelCell Energy on September 1, 2024 and sell it today you would earn a total of 137.00 from holding FuelCell Energy or generate 13.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
FuelCell Energy vs. Ion Beam Applications
Performance |
| Timeline |
| FuelCell Energy |
| Ion Beam Applications |
FuelCell Energy and Ion Beam Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FuelCell Energy and Ion Beam
The main advantage of trading using opposite FuelCell Energy and Ion Beam positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FuelCell Energy position performs unexpectedly, Ion Beam 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 Ion Beam will offset losses from the drop in Ion Beam's long position.| FuelCell Energy vs. Ion Beam Applications | FuelCell Energy vs. GlobalData PLC | FuelCell Energy vs. Leroy Seafood Group | FuelCell Energy vs. Tyson Foods Cl |
| Ion Beam vs. Uniper SE | Ion Beam vs. Mulberry Group PLC | Ion Beam vs. London Security Plc | Ion Beam vs. Triad Group PLC |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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