Correlation Between Delta CleanTech and Fuel Tech
Can any of the company-specific risk be diversified away by investing in both Delta CleanTech and Fuel Tech 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 Delta CleanTech and Fuel Tech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Delta CleanTech and Fuel Tech, you can compare the effects of market volatilities on Delta CleanTech and Fuel Tech 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 Delta CleanTech with a short position of Fuel Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Delta CleanTech and Fuel Tech.
Diversification Opportunities for Delta CleanTech and Fuel Tech
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Delta and Fuel is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Delta CleanTech and Fuel Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fuel Tech and Delta CleanTech 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 Delta CleanTech are associated (or correlated) with Fuel Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fuel Tech has no effect on the direction of Delta CleanTech i.e., Delta CleanTech and Fuel Tech go up and down completely randomly.
Pair Corralation between Delta CleanTech and Fuel Tech
Assuming the 90 days horizon Delta CleanTech is expected to generate 5.61 times more return on investment than Fuel Tech. However, Delta CleanTech is 5.61 times more volatile than Fuel Tech. It trades about 0.03 of its potential returns per unit of risk. Fuel Tech is currently generating about 0.0 per unit of risk. If you would invest 2.55 in Delta CleanTech on August 24, 2024 and sell it today you would lose (0.93) from holding Delta CleanTech or give up 36.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Delta CleanTech vs. Fuel Tech
Performance |
| Timeline |
| Delta CleanTech |
| Fuel Tech |
Delta CleanTech and Fuel Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Delta CleanTech and Fuel Tech
The main advantage of trading using opposite Delta CleanTech and Fuel Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Delta CleanTech position performs unexpectedly, Fuel Tech 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 Fuel Tech will offset losses from the drop in Fuel Tech's long position.| Delta CleanTech vs. Aker Carbon Capture | Delta CleanTech vs. TOMI Environmental Solutions | Delta CleanTech vs. Zurn Elkay Water | Delta CleanTech vs. Federal Signal |
| Fuel Tech vs. Federal Signal | Fuel Tech vs. Zurn Elkay Water | Fuel Tech vs. Energy Recovery | Fuel Tech vs. 374Water Common Stock |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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