Correlation Between FuelCell Energy and Vietnam Enterprise
Can any of the company-specific risk be diversified away by investing in both FuelCell Energy and Vietnam Enterprise 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 Vietnam Enterprise into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FuelCell Energy and Vietnam Enterprise Investments, you can compare the effects of market volatilities on FuelCell Energy and Vietnam Enterprise 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 Vietnam Enterprise. Check out your portfolio center. Please also check ongoing floating volatility patterns of FuelCell Energy and Vietnam Enterprise.
Diversification Opportunities for FuelCell Energy and Vietnam Enterprise
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between FuelCell and Vietnam is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding FuelCell Energy and Vietnam Enterprise Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vietnam Enterprise 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 Vietnam Enterprise. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vietnam Enterprise has no effect on the direction of FuelCell Energy i.e., FuelCell Energy and Vietnam Enterprise go up and down completely randomly.
Pair Corralation between FuelCell Energy and Vietnam Enterprise
Assuming the 90 days trading horizon FuelCell Energy is expected to generate 147.88 times more return on investment than Vietnam Enterprise. However, FuelCell Energy is 147.88 times more volatile than Vietnam Enterprise Investments. It trades about 0.11 of its potential returns per unit of risk. Vietnam Enterprise Investments is currently generating about 0.04 per unit of risk. If you would invest 1,529 in FuelCell Energy on October 25, 2024 and sell it today you would lose (636.00) from holding FuelCell Energy or give up 41.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.41% |
| Values | Daily Returns |
FuelCell Energy vs. Vietnam Enterprise Investments
Performance |
| Timeline |
| FuelCell Energy |
| Vietnam Enterprise |
FuelCell Energy and Vietnam Enterprise Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FuelCell Energy and Vietnam Enterprise
The main advantage of trading using opposite FuelCell Energy and Vietnam Enterprise positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FuelCell Energy position performs unexpectedly, Vietnam Enterprise 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 Vietnam Enterprise will offset losses from the drop in Vietnam Enterprise'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 |
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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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