Correlation Between FuelCell Energy and Sabien Technology
Can any of the company-specific risk be diversified away by investing in both FuelCell Energy and Sabien Technology 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 Sabien Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FuelCell Energy and Sabien Technology Group, you can compare the effects of market volatilities on FuelCell Energy and Sabien Technology 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 Sabien Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of FuelCell Energy and Sabien Technology.
Diversification Opportunities for FuelCell Energy and Sabien Technology
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between FuelCell and Sabien is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding FuelCell Energy and Sabien Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sabien Technology 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 Sabien Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sabien Technology has no effect on the direction of FuelCell Energy i.e., FuelCell Energy and Sabien Technology go up and down completely randomly.
Pair Corralation between FuelCell Energy and Sabien Technology
Assuming the 90 days trading horizon FuelCell Energy is expected to under-perform the Sabien Technology. In addition to that, FuelCell Energy is 1.41 times more volatile than Sabien Technology Group. It trades about -0.04 of its total potential returns per unit of risk. Sabien Technology Group is currently generating about 0.08 per unit of volatility. If you would invest 975.00 in Sabien Technology Group on October 25, 2024 and sell it today you would earn a total of 125.00 from holding Sabien Technology Group or generate 12.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 97.56% |
| Values | Daily Returns |
FuelCell Energy vs. Sabien Technology Group
Performance |
| Timeline |
| FuelCell Energy |
| Sabien Technology |
FuelCell Energy and Sabien Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FuelCell Energy and Sabien Technology
The main advantage of trading using opposite FuelCell Energy and Sabien Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FuelCell Energy position performs unexpectedly, Sabien Technology 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 Sabien Technology will offset losses from the drop in Sabien Technology'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 |
| Sabien Technology vs. BYD Co | Sabien Technology vs. Volkswagen AG | Sabien Technology vs. Volkswagen AG Non Vtg | Sabien Technology vs. Deutsche Post AG |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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