Correlation Between FuelCell Energy and Macfarlane Group
Can any of the company-specific risk be diversified away by investing in both FuelCell Energy and Macfarlane Group 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 Macfarlane Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FuelCell Energy and Macfarlane Group PLC, you can compare the effects of market volatilities on FuelCell Energy and Macfarlane Group 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 Macfarlane Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of FuelCell Energy and Macfarlane Group.
Diversification Opportunities for FuelCell Energy and Macfarlane Group
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between FuelCell and Macfarlane is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding FuelCell Energy and Macfarlane Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macfarlane Group PLC 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 Macfarlane Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Macfarlane Group PLC has no effect on the direction of FuelCell Energy i.e., FuelCell Energy and Macfarlane Group go up and down completely randomly.
Pair Corralation between FuelCell Energy and Macfarlane Group
Assuming the 90 days trading horizon FuelCell Energy is expected to generate 101.9 times more return on investment than Macfarlane Group. However, FuelCell Energy is 101.9 times more volatile than Macfarlane Group PLC. It trades about 0.14 of its potential returns per unit of risk. Macfarlane Group PLC is currently generating about -0.06 per unit of risk. If you would invest 2,826 in FuelCell Energy on September 3, 2024 and sell it today you would lose (1,637) from holding FuelCell Energy or give up 57.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.22% |
| Values | Daily Returns |
FuelCell Energy vs. Macfarlane Group PLC
Performance |
| Timeline |
| FuelCell Energy |
| Macfarlane Group PLC |
FuelCell Energy and Macfarlane Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FuelCell Energy and Macfarlane Group
The main advantage of trading using opposite FuelCell Energy and Macfarlane Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FuelCell Energy position performs unexpectedly, Macfarlane Group 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 Macfarlane Group will offset losses from the drop in Macfarlane Group's long position.| FuelCell Energy vs. Concurrent Technologies Plc | FuelCell Energy vs. The Mercantile Investment | FuelCell Energy vs. TR Property Investment | FuelCell Energy vs. TechnipFMC PLC |
| Macfarlane Group vs. Lundin Mining Corp | Macfarlane Group vs. Anglesey Mining | Macfarlane Group vs. Abingdon Health Plc | Macfarlane Group vs. Worldwide Healthcare Trust |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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