Correlation Between CDL INVESTMENT and FuelCell Energy
Can any of the company-specific risk be diversified away by investing in both CDL INVESTMENT 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 CDL INVESTMENT and FuelCell Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CDL INVESTMENT and FuelCell Energy, you can compare the effects of market volatilities on CDL INVESTMENT 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 CDL INVESTMENT with a short position of FuelCell Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of CDL INVESTMENT and FuelCell Energy.
Diversification Opportunities for CDL INVESTMENT and FuelCell Energy
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CDL and FuelCell is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding CDL INVESTMENT and FuelCell Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FuelCell Energy and CDL INVESTMENT 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 CDL INVESTMENT 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 CDL INVESTMENT i.e., CDL INVESTMENT and FuelCell Energy go up and down completely randomly.
Pair Corralation between CDL INVESTMENT and FuelCell Energy
Assuming the 90 days trading horizon CDL INVESTMENT is expected to generate 0.3 times more return on investment than FuelCell Energy. However, CDL INVESTMENT is 3.29 times less risky than FuelCell Energy. It trades about 0.02 of its potential returns per unit of risk. FuelCell Energy is currently generating about -0.03 per unit of risk. If you would invest 40.00 in CDL INVESTMENT on November 5, 2024 and sell it today you would earn a total of 3.00 from holding CDL INVESTMENT or generate 7.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 93.57% |
| Values | Daily Returns |
CDL INVESTMENT vs. FuelCell Energy
Performance |
| Timeline |
| CDL INVESTMENT |
| FuelCell Energy |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Modest
CDL INVESTMENT and FuelCell Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CDL INVESTMENT and FuelCell Energy
The main advantage of trading using opposite CDL INVESTMENT and FuelCell Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CDL INVESTMENT 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.| CDL INVESTMENT vs. MEDICAL FACILITIES NEW | CDL INVESTMENT vs. BOS BETTER ONLINE | CDL INVESTMENT vs. Peijia Medical Limited | CDL INVESTMENT vs. Lamar Advertising |
| FuelCell Energy vs. Delta Electronics Public | FuelCell Energy vs. YASKAWA ELEC UNSP | FuelCell Energy vs. Plug Power | FuelCell Energy vs. VERTIV HOLCL A |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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