Correlation Between Bloomsbury Publishing and FuelCell Energy
Can any of the company-specific risk be diversified away by investing in both Bloomsbury Publishing 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 Bloomsbury Publishing and FuelCell Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bloomsbury Publishing Plc and FuelCell Energy, you can compare the effects of market volatilities on Bloomsbury Publishing 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 Bloomsbury Publishing with a short position of FuelCell Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bloomsbury Publishing and FuelCell Energy.
Diversification Opportunities for Bloomsbury Publishing and FuelCell Energy
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bloomsbury and FuelCell is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Bloomsbury Publishing Plc and FuelCell Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FuelCell Energy and Bloomsbury Publishing 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 Bloomsbury Publishing Plc 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 Bloomsbury Publishing i.e., Bloomsbury Publishing and FuelCell Energy go up and down completely randomly.
Pair Corralation between Bloomsbury Publishing and FuelCell Energy
Assuming the 90 days trading horizon Bloomsbury Publishing is expected to generate 18.12 times less return on investment than FuelCell Energy. But when comparing it to its historical volatility, Bloomsbury Publishing Plc is 7.64 times less risky than FuelCell Energy. It trades about 0.11 of its potential returns per unit of risk. FuelCell Energy is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 679.00 in FuelCell Energy on September 15, 2024 and sell it today you would earn a total of 448.00 from holding FuelCell Energy or generate 65.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bloomsbury Publishing Plc vs. FuelCell Energy
Performance |
| Timeline |
| Bloomsbury Publishing Plc |
| FuelCell Energy |
Bloomsbury Publishing and FuelCell Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bloomsbury Publishing and FuelCell Energy
The main advantage of trading using opposite Bloomsbury Publishing and FuelCell Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bloomsbury Publishing 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.| Bloomsbury Publishing vs. Amedeo Air Four | Bloomsbury Publishing vs. Dolly Varden Silver | Bloomsbury Publishing vs. Atalaya Mining | Bloomsbury Publishing vs. AfriTin Mining |
| FuelCell Energy vs. Live Nation Entertainment | FuelCell Energy vs. Hollywood Bowl Group | FuelCell Energy vs. Nordic Semiconductor ASA | FuelCell Energy vs. Bloomsbury Publishing 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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