Correlation Between Elong Power and FuelCell Energy
Can any of the company-specific risk be diversified away by investing in both Elong Power 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 Elong Power and FuelCell Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Elong Power Holding and FuelCell Energy, you can compare the effects of market volatilities on Elong Power 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 Elong Power with a short position of FuelCell Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elong Power and FuelCell Energy.
Diversification Opportunities for Elong Power and FuelCell Energy
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Elong and FuelCell is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Elong Power Holding and FuelCell Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FuelCell Energy and Elong Power 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 Elong Power Holding 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 Elong Power i.e., Elong Power and FuelCell Energy go up and down completely randomly.
Pair Corralation between Elong Power and FuelCell Energy
Given the investment horizon of 90 days Elong Power Holding is expected to under-perform the FuelCell Energy. In addition to that, Elong Power is 1.44 times more volatile than FuelCell Energy. It trades about -0.23 of its total potential returns per unit of risk. FuelCell Energy is currently generating about 0.01 per unit of volatility. If you would invest 1,342 in FuelCell Energy on September 12, 2024 and sell it today you would lose (207.00) from holding FuelCell Energy or give up 15.42% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Elong Power Holding vs. FuelCell Energy
Performance |
| Timeline |
| Elong Power Holding |
| FuelCell Energy |
Elong Power and FuelCell Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elong Power and FuelCell Energy
The main advantage of trading using opposite Elong Power and FuelCell Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elong Power 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.| Elong Power vs. Bloom Energy Corp | Elong Power vs. Electrovaya Common Shares | Elong Power vs. Enovix Corp | Elong Power vs. Eos Energy Enterprises |
| 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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