Correlation Between United Internet and FuelCell Energy
Can any of the company-specific risk be diversified away by investing in both United Internet and FuelCell Energy 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 United Internet and FuelCell Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Internet AG and FuelCell Energy, you can compare the effects of market volatilities on United Internet and FuelCell Energy 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 United Internet with a short position of FuelCell Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Internet and FuelCell Energy.
Diversification Opportunities for United Internet and FuelCell Energy
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between United and FuelCell is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding United Internet AG and FuelCell Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FuelCell Energy and United Internet 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 United Internet AG are associated (or correlated) with FuelCell Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FuelCell Energy has no effect on the direction of United Internet i.e., United Internet and FuelCell Energy go up and down completely randomly.
Pair Corralation between United Internet and FuelCell Energy
Assuming the 90 days trading horizon United Internet AG is expected to under-perform the FuelCell Energy. But the stock apears to be less risky and, when comparing its historical volatility, United Internet AG is 6.68 times less risky than FuelCell Energy. The stock trades about -0.37 of its potential returns per unit of risk. The FuelCell Energy is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,101 in FuelCell Energy on October 11, 2024 and sell it today you would earn a total of 80.00 from holding FuelCell Energy or generate 7.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
United Internet AG vs. FuelCell Energy
Performance |
| Timeline |
| United Internet AG |
| FuelCell Energy |
United Internet and FuelCell Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Internet and FuelCell Energy
The main advantage of trading using opposite United Internet and FuelCell Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Internet position performs unexpectedly, FuelCell Energy 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 FuelCell Energy will offset losses from the drop in FuelCell Energy's long position.| United Internet vs. Gear4music Plc | United Internet vs. Empire Metals Limited | United Internet vs. Bloomsbury Publishing Plc | United Internet vs. Universal Music Group |
| FuelCell Energy vs. Rosslyn Data Technologies | FuelCell Energy vs. United Internet AG | FuelCell Energy vs. Spirent Communications plc | FuelCell Energy vs. Gamma Communications PLC |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
Other Complementary Tools
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |