Correlation Between FuelCell Energy and Energizer Holdings
Can any of the company-specific risk be diversified away by investing in both FuelCell Energy and Energizer Holdings 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 Energizer Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FuelCell Energy and Energizer Holdings, you can compare the effects of market volatilities on FuelCell Energy and Energizer Holdings 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 Energizer Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of FuelCell Energy and Energizer Holdings.
Diversification Opportunities for FuelCell Energy and Energizer Holdings
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between FuelCell and Energizer is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding FuelCell Energy and Energizer Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Energizer Holdings 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 Energizer Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Energizer Holdings has no effect on the direction of FuelCell Energy i.e., FuelCell Energy and Energizer Holdings go up and down completely randomly.
Pair Corralation between FuelCell Energy and Energizer Holdings
Given the investment horizon of 90 days FuelCell Energy is expected to under-perform the Energizer Holdings. In addition to that, FuelCell Energy is 3.03 times more volatile than Energizer Holdings. It trades about -0.2 of its total potential returns per unit of risk. Energizer Holdings is currently generating about -0.25 per unit of volatility. If you would invest 3,312 in Energizer Holdings on November 29, 2024 and sell it today you would lose (212.00) from holding Energizer Holdings or give up 6.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FuelCell Energy vs. Energizer Holdings
Performance |
| Timeline |
| FuelCell Energy |
| Energizer Holdings |
FuelCell Energy and Energizer Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FuelCell Energy and Energizer Holdings
The main advantage of trading using opposite FuelCell Energy and Energizer Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FuelCell Energy position performs unexpectedly, Energizer Holdings 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 Energizer Holdings will offset losses from the drop in Energizer Holdings' long position.| FuelCell Energy vs. Bloom Energy Corp | FuelCell Energy vs. Microvast Holdings | FuelCell Energy vs. Solid Power | FuelCell Energy vs. Enovix Corp |
| Energizer Holdings vs. Acuity Brands | Energizer Holdings vs. Espey Mfg Electronics | Energizer Holdings vs. Preformed Line Products | Energizer Holdings vs. Kimball 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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