Correlation Between Enovix Corp and FuelCell Energy
Can any of the company-specific risk be diversified away by investing in both Enovix Corp 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 Enovix Corp and FuelCell Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enovix Corp and FuelCell Energy, you can compare the effects of market volatilities on Enovix Corp 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 Enovix Corp with a short position of FuelCell Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enovix Corp and FuelCell Energy.
Diversification Opportunities for Enovix Corp and FuelCell Energy
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Enovix and FuelCell is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Enovix Corp and FuelCell Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FuelCell Energy and Enovix Corp 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 Enovix Corp 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 Enovix Corp i.e., Enovix Corp and FuelCell Energy go up and down completely randomly.
Pair Corralation between Enovix Corp and FuelCell Energy
Given the investment horizon of 90 days Enovix Corp is expected to generate 1.08 times more return on investment than FuelCell Energy. However, Enovix Corp is 1.08 times more volatile than FuelCell Energy. It trades about 0.02 of its potential returns per unit of risk. FuelCell Energy is currently generating about -0.06 per unit of risk. If you would invest 1,173 in Enovix Corp on August 27, 2024 and sell it today you would lose (230.00) from holding Enovix Corp or give up 19.61% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Enovix Corp vs. FuelCell Energy
Performance |
| Timeline |
| Enovix Corp |
| FuelCell Energy |
Enovix Corp and FuelCell Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enovix Corp and FuelCell Energy
The main advantage of trading using opposite Enovix Corp and FuelCell Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enovix Corp 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.| Enovix Corp vs. Bloom Energy Corp | Enovix Corp vs. Eos Energy Enterprises | Enovix Corp vs. Sunrise New Energy | Enovix Corp vs. Flux Power Holdings |
| FuelCell Energy vs. Bloom Energy Corp | FuelCell Energy vs. Eos Energy Enterprises | FuelCell Energy vs. Sunrise New Energy | FuelCell Energy vs. Flux Power Holdings |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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