Correlation Between FuelCell Energy and Heramba Electric
Can any of the company-specific risk be diversified away by investing in both FuelCell Energy and Heramba Electric 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 Heramba Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FuelCell Energy and Heramba Electric plc, you can compare the effects of market volatilities on FuelCell Energy and Heramba Electric 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 Heramba Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of FuelCell Energy and Heramba Electric.
Diversification Opportunities for FuelCell Energy and Heramba Electric
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between FuelCell and Heramba is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding FuelCell Energy and Heramba Electric plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heramba Electric plc 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 Heramba Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Heramba Electric plc has no effect on the direction of FuelCell Energy i.e., FuelCell Energy and Heramba Electric go up and down completely randomly.
Pair Corralation between FuelCell Energy and Heramba Electric
Given the investment horizon of 90 days FuelCell Energy is expected to generate 1.49 times less return on investment than Heramba Electric. In addition to that, FuelCell Energy is 1.97 times more volatile than Heramba Electric plc. It trades about 0.07 of its total potential returns per unit of risk. Heramba Electric plc is currently generating about 0.22 per unit of volatility. If you would invest 110.00 in Heramba Electric plc on August 31, 2024 and sell it today you would earn a total of 32.00 from holding Heramba Electric plc or generate 29.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FuelCell Energy vs. Heramba Electric plc
Performance |
| Timeline |
| FuelCell Energy |
| Heramba Electric plc |
FuelCell Energy and Heramba Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FuelCell Energy and Heramba Electric
The main advantage of trading using opposite FuelCell Energy and Heramba Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FuelCell Energy position performs unexpectedly, Heramba Electric 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 Heramba Electric will offset losses from the drop in Heramba Electric's long position.| FuelCell Energy vs. Bloom Energy Corp | FuelCell Energy vs. Microvast Holdings | FuelCell Energy vs. Solid Power | FuelCell Energy vs. Enovix Corp |
| Heramba Electric vs. Plug Power | Heramba Electric vs. FREYR Battery SA | Heramba Electric vs. FuelCell Energy | Heramba Electric vs. Enovix Corp |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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