Correlation Between FuelCell Energy and Light Science
Can any of the company-specific risk be diversified away by investing in both FuelCell Energy and Light Science 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 Light Science into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FuelCell Energy and Light Science Technologies, you can compare the effects of market volatilities on FuelCell Energy and Light Science 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 Light Science. Check out your portfolio center. Please also check ongoing floating volatility patterns of FuelCell Energy and Light Science.
Diversification Opportunities for FuelCell Energy and Light Science
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between FuelCell and Light is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding FuelCell Energy and Light Science Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Light Science Techno 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 Light Science. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Light Science Techno has no effect on the direction of FuelCell Energy i.e., FuelCell Energy and Light Science go up and down completely randomly.
Pair Corralation between FuelCell Energy and Light Science
Assuming the 90 days trading horizon FuelCell Energy is expected to under-perform the Light Science. In addition to that, FuelCell Energy is 2.57 times more volatile than Light Science Technologies. It trades about -0.12 of its total potential returns per unit of risk. Light Science Technologies is currently generating about -0.24 per unit of volatility. If you would invest 270.00 in Light Science Technologies on October 24, 2024 and sell it today you would lose (35.00) from holding Light Science Technologies or give up 12.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
FuelCell Energy vs. Light Science Technologies
Performance |
| Timeline |
| FuelCell Energy |
| Light Science Techno |
FuelCell Energy and Light Science Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FuelCell Energy and Light Science
The main advantage of trading using opposite FuelCell Energy and Light Science positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FuelCell Energy position performs unexpectedly, Light Science 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 Light Science will offset losses from the drop in Light Science's long position.| FuelCell Energy vs. Taiwan Semiconductor Manufacturing | FuelCell Energy vs. Jupiter Fund Management | FuelCell Energy vs. JB Hunt Transport | FuelCell Energy vs. EJF Investments |
| Light Science vs. Global Net Lease | Light Science vs. Solstad Offshore ASA | Light Science vs. Host Hotels Resorts | Light Science vs. Ecofin Global Utilities |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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