Correlation Between FuelCell Energy and BlackRock Frontiers
Can any of the company-specific risk be diversified away by investing in both FuelCell Energy and BlackRock Frontiers 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 BlackRock Frontiers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FuelCell Energy and BlackRock Frontiers Investment, you can compare the effects of market volatilities on FuelCell Energy and BlackRock Frontiers 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 BlackRock Frontiers. Check out your portfolio center. Please also check ongoing floating volatility patterns of FuelCell Energy and BlackRock Frontiers.
Diversification Opportunities for FuelCell Energy and BlackRock Frontiers
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between FuelCell and BlackRock is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding FuelCell Energy and BlackRock Frontiers Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BlackRock Frontiers 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 BlackRock Frontiers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BlackRock Frontiers has no effect on the direction of FuelCell Energy i.e., FuelCell Energy and BlackRock Frontiers go up and down completely randomly.
Pair Corralation between FuelCell Energy and BlackRock Frontiers
Assuming the 90 days trading horizon FuelCell Energy is expected to generate 8.87 times more return on investment than BlackRock Frontiers. However, FuelCell Energy is 8.87 times more volatile than BlackRock Frontiers Investment. It trades about 0.08 of its potential returns per unit of risk. BlackRock Frontiers Investment is currently generating about 0.34 per unit of risk. If you would invest 1,101 in FuelCell Energy on October 11, 2024 and sell it today you would earn a total of 80.00 from holding FuelCell Energy or generate 7.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
FuelCell Energy vs. BlackRock Frontiers Investment
Performance |
| Timeline |
| FuelCell Energy |
| BlackRock Frontiers |
FuelCell Energy and BlackRock Frontiers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FuelCell Energy and BlackRock Frontiers
The main advantage of trading using opposite FuelCell Energy and BlackRock Frontiers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FuelCell Energy position performs unexpectedly, BlackRock Frontiers 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 BlackRock Frontiers will offset losses from the drop in BlackRock Frontiers' long position.| FuelCell Energy vs. Rosslyn Data Technologies | FuelCell Energy vs. United Internet AG | FuelCell Energy vs. Spirent Communications plc | FuelCell Energy vs. Gamma Communications PLC |
| BlackRock Frontiers vs. SupplyMe Capital PLC | BlackRock Frontiers vs. SM Energy Co | BlackRock Frontiers vs. FuelCell Energy | BlackRock Frontiers vs. Grand Vision Media |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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