Correlation Between AFC Energy and FuelPositive Corp
Can any of the company-specific risk be diversified away by investing in both AFC Energy and FuelPositive Corp 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 FuelPositive Corp 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 FuelPositive Corp, you can compare the effects of market volatilities on AFC Energy and FuelPositive Corp 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 FuelPositive Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of AFC Energy and FuelPositive Corp.
Diversification Opportunities for AFC Energy and FuelPositive Corp
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between AFC and FuelPositive is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding AFC Energy plc and FuelPositive Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FuelPositive Corp 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 FuelPositive Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FuelPositive Corp has no effect on the direction of AFC Energy i.e., AFC Energy and FuelPositive Corp go up and down completely randomly.
Pair Corralation between AFC Energy and FuelPositive Corp
Assuming the 90 days horizon AFC Energy plc is expected to under-perform the FuelPositive Corp. But the pink sheet apears to be less risky and, when comparing its historical volatility, AFC Energy plc is 2.0 times less risky than FuelPositive Corp. The pink sheet trades about 0.0 of its potential returns per unit of risk. The FuelPositive Corp is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 12.00 in FuelPositive Corp on August 28, 2024 and sell it today you would lose (10.00) from holding FuelPositive Corp or give up 83.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AFC Energy plc vs. FuelPositive Corp
Performance |
| Timeline |
| AFC Energy plc |
| FuelPositive Corp |
AFC Energy and FuelPositive Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AFC Energy and FuelPositive Corp
The main advantage of trading using opposite AFC Energy and FuelPositive Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AFC Energy position performs unexpectedly, FuelPositive Corp 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 FuelPositive Corp will offset losses from the drop in FuelPositive Corp's long position.| AFC Energy vs. FREYR Battery SA | AFC Energy vs. nVent Electric PLC | AFC Energy vs. Hubbell | AFC Energy vs. Advanced Energy Industries |
| FuelPositive Corp vs. AmmPower Corp | FuelPositive Corp vs. FuelPositive Corp | FuelPositive Corp vs. Graphene Manufacturing Group | FuelPositive Corp vs. Exro Technologies |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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