Correlation Between AFC Energy and Hubbell
Can any of the company-specific risk be diversified away by investing in both AFC Energy and Hubbell 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 AFC Energy and Hubbell into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AFC Energy plc and Hubbell, you can compare the effects of market volatilities on AFC Energy and Hubbell 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 AFC Energy with a short position of Hubbell. Check out your portfolio center. Please also check ongoing floating volatility patterns of AFC Energy and Hubbell.
Diversification Opportunities for AFC Energy and Hubbell
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between AFC and Hubbell is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding AFC Energy plc and Hubbell in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hubbell and AFC 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 AFC Energy plc are associated (or correlated) with Hubbell. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hubbell has no effect on the direction of AFC Energy i.e., AFC Energy and Hubbell go up and down completely randomly.
Pair Corralation between AFC Energy and Hubbell
Assuming the 90 days horizon AFC Energy plc is expected to under-perform the Hubbell. In addition to that, AFC Energy is 2.92 times more volatile than Hubbell. It trades about 0.0 of its total potential returns per unit of risk. Hubbell is currently generating about 0.08 per unit of volatility. If you would invest 24,462 in Hubbell on August 29, 2024 and sell it today you would earn a total of 21,612 from holding Hubbell or generate 88.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AFC Energy plc vs. Hubbell
Performance |
| Timeline |
| AFC Energy plc |
| Hubbell |
AFC Energy and Hubbell Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AFC Energy and Hubbell
The main advantage of trading using opposite AFC Energy and Hubbell positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AFC Energy position performs unexpectedly, Hubbell 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 Hubbell will offset losses from the drop in Hubbell's long position.| AFC Energy vs. Legrand SA ADR | AFC Energy vs. Loop Energy | AFC Energy vs. Sunrise New Energy | AFC Energy vs. Alfen NV |
| Hubbell vs. Advanced Energy Industries | Hubbell vs. Enersys | Hubbell vs. Acuity Brands | Hubbell vs. Kimball Electronics |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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