Correlation Between FuelCell Energy and GrafTech International
Can any of the company-specific risk be diversified away by investing in both FuelCell Energy and GrafTech International 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 GrafTech International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FuelCell Energy and GrafTech International, you can compare the effects of market volatilities on FuelCell Energy and GrafTech International 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 GrafTech International. Check out your portfolio center. Please also check ongoing floating volatility patterns of FuelCell Energy and GrafTech International.
Diversification Opportunities for FuelCell Energy and GrafTech International
-0.87 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between FuelCell and GrafTech is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding FuelCell Energy and GrafTech International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GrafTech International 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 GrafTech International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GrafTech International has no effect on the direction of FuelCell Energy i.e., FuelCell Energy and GrafTech International go up and down completely randomly.
Pair Corralation between FuelCell Energy and GrafTech International
Given the investment horizon of 90 days FuelCell Energy is expected to under-perform the GrafTech International. In addition to that, FuelCell Energy is 1.1 times more volatile than GrafTech International. It trades about -0.06 of its total potential returns per unit of risk. GrafTech International is currently generating about -0.01 per unit of volatility. If you would invest 545.00 in GrafTech International on August 27, 2024 and sell it today you would lose (337.00) from holding GrafTech International or give up 61.83% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FuelCell Energy vs. GrafTech International
Performance |
| Timeline |
| FuelCell Energy |
| GrafTech International |
FuelCell Energy and GrafTech International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FuelCell Energy and GrafTech International
The main advantage of trading using opposite FuelCell Energy and GrafTech International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FuelCell Energy position performs unexpectedly, GrafTech International 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 GrafTech International will offset losses from the drop in GrafTech International's long position.| FuelCell Energy vs. Bloom Energy Corp | FuelCell Energy vs. Eos Energy Enterprises | FuelCell Energy vs. Sunrise New Energy | FuelCell Energy vs. Flux Power Holdings |
| GrafTech International vs. Kimball Electronics | GrafTech International vs. Hayward Holdings | GrafTech International vs. Enersys | GrafTech International vs. Espey Mfg Electronics |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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