Correlation Between FuelCell Energy and Acuity Brands
Can any of the company-specific risk be diversified away by investing in both FuelCell Energy and Acuity Brands 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 FuelCell Energy and Acuity Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FuelCell Energy and Acuity Brands, you can compare the effects of market volatilities on FuelCell Energy and Acuity Brands 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 FuelCell Energy with a short position of Acuity Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of FuelCell Energy and Acuity Brands.
Diversification Opportunities for FuelCell Energy and Acuity Brands
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between FuelCell and Acuity is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding FuelCell Energy and Acuity Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acuity Brands and FuelCell Energy 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 FuelCell Energy are associated (or correlated) with Acuity Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acuity Brands has no effect on the direction of FuelCell Energy i.e., FuelCell Energy and Acuity Brands go up and down completely randomly.
Pair Corralation between FuelCell Energy and Acuity Brands
Given the investment horizon of 90 days FuelCell Energy is expected to under-perform the Acuity Brands. In addition to that, FuelCell Energy is 3.11 times more volatile than Acuity Brands. It trades about -0.07 of its total potential returns per unit of risk. Acuity Brands is currently generating about 0.07 per unit of volatility. If you would invest 18,800 in Acuity Brands on August 23, 2024 and sell it today you would earn a total of 13,241 from holding Acuity Brands or generate 70.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FuelCell Energy vs. Acuity Brands
Performance |
| Timeline |
| FuelCell Energy |
| Acuity Brands |
FuelCell Energy and Acuity Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FuelCell Energy and Acuity Brands
The main advantage of trading using opposite FuelCell Energy and Acuity Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FuelCell Energy position performs unexpectedly, Acuity Brands 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 Acuity Brands will offset losses from the drop in Acuity Brands' long position.| FuelCell Energy vs. Bloom Energy Corp | FuelCell Energy vs. Microvast Holdings | FuelCell Energy vs. Solid Power | FuelCell Energy vs. Enovix Corp |
| Acuity Brands vs. Energizer Holdings | Acuity Brands vs. Espey Mfg Electronics | Acuity Brands vs. Preformed Line Products | Acuity Brands vs. nVent Electric PLC |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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