Correlation Between FuelCell Energy and Samsung Electronics
Can any of the company-specific risk be diversified away by investing in both FuelCell Energy and Samsung Electronics 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 Samsung Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FuelCell Energy and Samsung Electronics Co, you can compare the effects of market volatilities on FuelCell Energy and Samsung Electronics 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 Samsung Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of FuelCell Energy and Samsung Electronics.
Diversification Opportunities for FuelCell Energy and Samsung Electronics
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between FuelCell and Samsung is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding FuelCell Energy and Samsung Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Electronics 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 Samsung Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samsung Electronics has no effect on the direction of FuelCell Energy i.e., FuelCell Energy and Samsung Electronics go up and down completely randomly.
Pair Corralation between FuelCell Energy and Samsung Electronics
Assuming the 90 days trading horizon FuelCell Energy is expected to generate 63.05 times more return on investment than Samsung Electronics. However, FuelCell Energy is 63.05 times more volatile than Samsung Electronics Co. It trades about 0.1 of its potential returns per unit of risk. Samsung Electronics Co is currently generating about -0.07 per unit of risk. If you would invest 4,800 in FuelCell Energy on August 25, 2024 and sell it today you would lose (3,960) from holding FuelCell Energy or give up 82.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.57% |
| Values | Daily Returns |
FuelCell Energy vs. Samsung Electronics Co
Performance |
| Timeline |
| FuelCell Energy |
| Samsung Electronics |
FuelCell Energy and Samsung Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FuelCell Energy and Samsung Electronics
The main advantage of trading using opposite FuelCell Energy and Samsung Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FuelCell Energy position performs unexpectedly, Samsung Electronics 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 Samsung Electronics will offset losses from the drop in Samsung Electronics' long position.| FuelCell Energy vs. Samsung Electronics Co | FuelCell Energy vs. Samsung Electronics Co | FuelCell Energy vs. Hyundai Motor | FuelCell Energy vs. Toyota Motor Corp |
| Samsung Electronics vs. Toyota Motor Corp | Samsung Electronics vs. SoftBank Group Corp | Samsung Electronics vs. OTP Bank Nyrt | Samsung Electronics vs. Las Vegas Sands |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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