Correlation Between FuelCell Energy and EJF Investments
Can any of the company-specific risk be diversified away by investing in both FuelCell Energy and EJF Investments 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 EJF Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FuelCell Energy and EJF Investments, you can compare the effects of market volatilities on FuelCell Energy and EJF Investments 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 EJF Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of FuelCell Energy and EJF Investments.
Diversification Opportunities for FuelCell Energy and EJF Investments
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between FuelCell and EJF is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding FuelCell Energy and EJF Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EJF Investments 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 EJF Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EJF Investments has no effect on the direction of FuelCell Energy i.e., FuelCell Energy and EJF Investments go up and down completely randomly.
Pair Corralation between FuelCell Energy and EJF Investments
Assuming the 90 days trading horizon FuelCell Energy is expected to generate 76.45 times more return on investment than EJF Investments. However, FuelCell Energy is 76.45 times more volatile than EJF Investments. It trades about 0.1 of its potential returns per unit of risk. EJF Investments is currently generating about 0.01 per unit of risk. If you would invest 10,206 in FuelCell Energy on October 17, 2024 and sell it today you would lose (9,224) from holding FuelCell Energy or give up 90.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
FuelCell Energy vs. EJF Investments
Performance |
| Timeline |
| FuelCell Energy |
| EJF Investments |
FuelCell Energy and EJF Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FuelCell Energy and EJF Investments
The main advantage of trading using opposite FuelCell Energy and EJF Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FuelCell Energy position performs unexpectedly, EJF Investments 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 EJF Investments will offset losses from the drop in EJF Investments' long position.| FuelCell Energy vs. XLMedia PLC | FuelCell Energy vs. LBG Media PLC | FuelCell Energy vs. Eco Animal Health | FuelCell Energy vs. Abingdon Health Plc |
| EJF Investments vs. SupplyMe Capital PLC | EJF Investments vs. SM Energy Co | EJF Investments vs. FuelCell Energy | EJF Investments 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency |