Correlation Between FuelCell Energy and Enersys
Can any of the company-specific risk be diversified away by investing in both FuelCell Energy and Enersys 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 Enersys into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FuelCell Energy and Enersys, you can compare the effects of market volatilities on FuelCell Energy and Enersys 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 Enersys. Check out your portfolio center. Please also check ongoing floating volatility patterns of FuelCell Energy and Enersys.
Diversification Opportunities for FuelCell Energy and Enersys
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between FuelCell and Enersys is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding FuelCell Energy and Enersys in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enersys 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 Enersys. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enersys has no effect on the direction of FuelCell Energy i.e., FuelCell Energy and Enersys go up and down completely randomly.
Pair Corralation between FuelCell Energy and Enersys
Given the investment horizon of 90 days FuelCell Energy is expected to generate 6.19 times more return on investment than Enersys. However, FuelCell Energy is 6.19 times more volatile than Enersys. It trades about 0.04 of its potential returns per unit of risk. Enersys is currently generating about -0.03 per unit of risk. If you would invest 1,101 in FuelCell Energy on August 28, 2024 and sell it today you would lose (57.00) from holding FuelCell Energy or give up 5.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FuelCell Energy vs. Enersys
Performance |
| Timeline |
| FuelCell Energy |
| Enersys |
FuelCell Energy and Enersys Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FuelCell Energy and Enersys
The main advantage of trading using opposite FuelCell Energy and Enersys positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FuelCell Energy position performs unexpectedly, Enersys 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 Enersys will offset losses from the drop in Enersys' long position.| FuelCell Energy vs. Bloom Energy Corp | FuelCell Energy vs. Eos Energy Enterprises | FuelCell Energy vs. Sunrise New Energy | FuelCell Energy vs. GrafTech International |
| Enersys vs. Advanced Energy Industries | Enersys vs. Hubbell | Enersys vs. Acuity Brands | Enersys 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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