Correlation Between FuelCell Energy and TMT Acquisition
Can any of the company-specific risk be diversified away by investing in both FuelCell Energy and TMT Acquisition 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 TMT Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FuelCell Energy and TMT Acquisition Corp, you can compare the effects of market volatilities on FuelCell Energy and TMT Acquisition 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 TMT Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of FuelCell Energy and TMT Acquisition.
Diversification Opportunities for FuelCell Energy and TMT Acquisition
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between FuelCell and TMT is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding FuelCell Energy and TMT Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TMT Acquisition Corp 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 TMT Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TMT Acquisition Corp has no effect on the direction of FuelCell Energy i.e., FuelCell Energy and TMT Acquisition go up and down completely randomly.
Pair Corralation between FuelCell Energy and TMT Acquisition
Given the investment horizon of 90 days FuelCell Energy is expected to generate 1.18 times more return on investment than TMT Acquisition. However, FuelCell Energy is 1.18 times more volatile than TMT Acquisition Corp. It trades about 0.11 of its potential returns per unit of risk. TMT Acquisition Corp is currently generating about 0.03 per unit of risk. If you would invest 1,032 in FuelCell Energy on September 1, 2024 and sell it today you would earn a total of 155.00 from holding FuelCell Energy or generate 15.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 61.9% |
| Values | Daily Returns |
FuelCell Energy vs. TMT Acquisition Corp
Performance |
| Timeline |
| FuelCell Energy |
| TMT Acquisition Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
FuelCell Energy and TMT Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FuelCell Energy and TMT Acquisition
The main advantage of trading using opposite FuelCell Energy and TMT Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FuelCell Energy position performs unexpectedly, TMT Acquisition 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 TMT Acquisition will offset losses from the drop in TMT Acquisition's long position.| FuelCell Energy vs. Bloom Energy Corp | FuelCell Energy vs. Microvast Holdings | FuelCell Energy vs. Solid Power | FuelCell Energy vs. Enovix Corp |
| TMT Acquisition vs. Analog Devices | TMT Acquisition vs. Thai Beverage PCL | TMT Acquisition vs. Vita Coco | TMT Acquisition vs. Aehr Test Systems |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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