Correlation Between SWISS WATER and FuelCell Energy
Can any of the company-specific risk be diversified away by investing in both SWISS WATER 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 SWISS WATER and FuelCell Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SWISS WATER DECAFFCOFFEE and FuelCell Energy, you can compare the effects of market volatilities on SWISS WATER 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 SWISS WATER with a short position of FuelCell Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of SWISS WATER and FuelCell Energy.
Diversification Opportunities for SWISS WATER and FuelCell Energy
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SWISS and FuelCell is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding SWISS WATER DECAFFCOFFEE and FuelCell Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FuelCell Energy and SWISS WATER 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 SWISS WATER DECAFFCOFFEE 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 SWISS WATER i.e., SWISS WATER and FuelCell Energy go up and down completely randomly.
Pair Corralation between SWISS WATER and FuelCell Energy
Assuming the 90 days horizon SWISS WATER DECAFFCOFFEE is expected to under-perform the FuelCell Energy. But the stock apears to be less risky and, when comparing its historical volatility, SWISS WATER DECAFFCOFFEE is 2.44 times less risky than FuelCell Energy. The stock trades about -0.21 of its potential returns per unit of risk. The FuelCell Energy is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 948.00 in FuelCell Energy on October 30, 2024 and sell it today you would earn a total of 182.00 from holding FuelCell Energy or generate 19.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 42.11% |
| Values | Daily Returns |
SWISS WATER DECAFFCOFFEE vs. FuelCell Energy
Performance |
| Timeline |
| SWISS WATER DECAFFCOFFEE |
| FuelCell Energy |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
SWISS WATER and FuelCell Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SWISS WATER and FuelCell Energy
The main advantage of trading using opposite SWISS WATER and FuelCell Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SWISS WATER 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.| SWISS WATER vs. China Railway Construction | SWISS WATER vs. WIMFARM SA EO | SWISS WATER vs. Daito Trust Construction | SWISS WATER vs. Dairy Farm International |
| FuelCell Energy vs. Mitsui Chemicals | FuelCell Energy vs. China Resources Beer | FuelCell Energy vs. Thai Beverage Public | FuelCell Energy vs. Retail Estates NV |
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 CEOs Directory module to screen CEOs from public companies around the world.
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