Correlation Between FuelCell Energy and Flux Power
Can any of the company-specific risk be diversified away by investing in both FuelCell Energy and Flux Power 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 Flux Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FuelCell Energy and Flux Power Holdings, you can compare the effects of market volatilities on FuelCell Energy and Flux Power 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 Flux Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of FuelCell Energy and Flux Power.
Diversification Opportunities for FuelCell Energy and Flux Power
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between FuelCell and Flux is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding FuelCell Energy and Flux Power Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flux Power 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 Flux Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flux Power Holdings has no effect on the direction of FuelCell Energy i.e., FuelCell Energy and Flux Power go up and down completely randomly.
Pair Corralation between FuelCell Energy and Flux Power
Given the investment horizon of 90 days FuelCell Energy is expected to under-perform the Flux Power. In addition to that, FuelCell Energy is 1.15 times more volatile than Flux Power Holdings. It trades about -0.07 of its total potential returns per unit of risk. Flux Power Holdings is currently generating about -0.01 per unit of volatility. If you would invest 526.00 in Flux Power Holdings on August 23, 2024 and sell it today you would lose (289.00) from holding Flux Power Holdings or give up 54.94% 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. Flux Power Holdings
Performance |
| Timeline |
| FuelCell Energy |
| Flux Power Holdings |
FuelCell Energy and Flux Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FuelCell Energy and Flux Power
The main advantage of trading using opposite FuelCell Energy and Flux Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FuelCell Energy position performs unexpectedly, Flux Power 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 Flux Power will offset losses from the drop in Flux Power's long position.| FuelCell Energy vs. Bloom Energy Corp | FuelCell Energy vs. Microvast Holdings | FuelCell Energy vs. Solid Power | FuelCell Energy vs. Enovix Corp |
| Flux Power vs. Espey Mfg Electronics | Flux Power vs. NeoVolta Warrant | Flux Power vs. Kimball Electronics | Flux Power vs. Hayward 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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