Correlation Between FuelCell Energy and Vodafone Group
Can any of the company-specific risk be diversified away by investing in both FuelCell Energy and Vodafone 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 Vodafone 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 Vodafone Group PLC, you can compare the effects of market volatilities on FuelCell Energy and Vodafone 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 Vodafone Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of FuelCell Energy and Vodafone Group.
Diversification Opportunities for FuelCell Energy and Vodafone Group
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between FuelCell and Vodafone is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding FuelCell Energy and Vodafone Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vodafone 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 Vodafone Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vodafone Group PLC has no effect on the direction of FuelCell Energy i.e., FuelCell Energy and Vodafone Group go up and down completely randomly.
Pair Corralation between FuelCell Energy and Vodafone Group
Assuming the 90 days trading horizon FuelCell Energy is expected to generate 73.31 times more return on investment than Vodafone Group. However, FuelCell Energy is 73.31 times more volatile than Vodafone Group PLC. It trades about 0.11 of its potential returns per unit of risk. Vodafone Group PLC is currently generating about -0.02 per unit of risk. If you would invest 9,804 in FuelCell Energy on August 30, 2024 and sell it today you would lose (8,660) from holding FuelCell Energy or give up 88.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.4% |
| Values | Daily Returns |
FuelCell Energy vs. Vodafone Group PLC
Performance |
| Timeline |
| FuelCell Energy |
| Vodafone Group PLC |
FuelCell Energy and Vodafone Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FuelCell Energy and Vodafone Group
The main advantage of trading using opposite FuelCell Energy and Vodafone Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FuelCell Energy position performs unexpectedly, Vodafone 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 Vodafone Group will offset losses from the drop in Vodafone Group's long position.| FuelCell Energy vs. Invesco Physical Silver | FuelCell Energy vs. Zoom Video Communications | FuelCell Energy vs. Hochschild Mining plc | FuelCell Energy vs. Blackrock World Mining |
| Vodafone Group vs. Air Products Chemicals | Vodafone Group vs. Southwest Airlines Co | Vodafone Group vs. Polar Capital Technology | Vodafone Group vs. Vitec Software Group |
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.
Other Complementary Tools
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities |