Correlation Between FuelCell Energy and Intermediate Capital
Can any of the company-specific risk be diversified away by investing in both FuelCell Energy and Intermediate Capital 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 Intermediate Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FuelCell Energy and Intermediate Capital Group, you can compare the effects of market volatilities on FuelCell Energy and Intermediate Capital 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 Intermediate Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of FuelCell Energy and Intermediate Capital.
Diversification Opportunities for FuelCell Energy and Intermediate Capital
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between FuelCell and Intermediate is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding FuelCell Energy and Intermediate Capital Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intermediate Capital 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 Intermediate Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intermediate Capital has no effect on the direction of FuelCell Energy i.e., FuelCell Energy and Intermediate Capital go up and down completely randomly.
Pair Corralation between FuelCell Energy and Intermediate Capital
Assuming the 90 days trading horizon FuelCell Energy is expected to generate 4.33 times more return on investment than Intermediate Capital. However, FuelCell Energy is 4.33 times more volatile than Intermediate Capital Group. It trades about -0.01 of its potential returns per unit of risk. Intermediate Capital Group is currently generating about -0.07 per unit of risk. If you would invest 1,067 in FuelCell Energy on October 18, 2024 and sell it today you would lose (85.00) from holding FuelCell Energy or give up 7.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
FuelCell Energy vs. Intermediate Capital Group
Performance |
| Timeline |
| FuelCell Energy |
| Intermediate Capital |
FuelCell Energy and Intermediate Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FuelCell Energy and Intermediate Capital
The main advantage of trading using opposite FuelCell Energy and Intermediate Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FuelCell Energy position performs unexpectedly, Intermediate Capital 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 Intermediate Capital will offset losses from the drop in Intermediate Capital's 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 |
| Intermediate Capital vs. SupplyMe Capital PLC | Intermediate Capital vs. SM Energy Co | Intermediate Capital vs. FuelCell Energy | Intermediate Capital 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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