Correlation Between GrafTech International and FuelCell Energy
Can any of the company-specific risk be diversified away by investing in both GrafTech International 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 GrafTech International and FuelCell Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GrafTech International and FuelCell Energy, you can compare the effects of market volatilities on GrafTech International 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 GrafTech International with a short position of FuelCell Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of GrafTech International and FuelCell Energy.
Diversification Opportunities for GrafTech International and FuelCell Energy
-0.87 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GrafTech and FuelCell is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding GrafTech International and FuelCell Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FuelCell Energy and GrafTech International 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 GrafTech International 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 GrafTech International i.e., GrafTech International and FuelCell Energy go up and down completely randomly.
Pair Corralation between GrafTech International and FuelCell Energy
Considering the 90-day investment horizon GrafTech International is expected to generate 0.91 times more return on investment than FuelCell Energy. However, GrafTech International is 1.1 times less risky than FuelCell Energy. It trades about -0.01 of its potential returns per unit of risk. FuelCell Energy is currently generating about -0.07 per unit of risk. If you would invest 520.00 in GrafTech International on August 23, 2024 and sell it today you would lose (312.00) from holding GrafTech International or give up 60.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GrafTech International vs. FuelCell Energy
Performance |
| Timeline |
| GrafTech International |
| FuelCell Energy |
GrafTech International and FuelCell Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GrafTech International and FuelCell Energy
The main advantage of trading using opposite GrafTech International and FuelCell Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GrafTech International 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.| GrafTech International vs. Bloom Energy Corp | GrafTech International vs. Kimball Electronics | GrafTech International vs. Enovix Corp | GrafTech International vs. Sunrise New Energy |
| FuelCell Energy vs. Bloom Energy Corp | FuelCell Energy vs. Microvast Holdings | FuelCell Energy vs. Solid Power | FuelCell Energy vs. Enovix Corp |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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