Correlation Between FuelCell Energy and PPHE HOTEL
Can any of the company-specific risk be diversified away by investing in both FuelCell Energy and PPHE HOTEL 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 PPHE HOTEL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FuelCell Energy and PPHE HOTEL GROUP, you can compare the effects of market volatilities on FuelCell Energy and PPHE HOTEL 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 PPHE HOTEL. Check out your portfolio center. Please also check ongoing floating volatility patterns of FuelCell Energy and PPHE HOTEL.
Diversification Opportunities for FuelCell Energy and PPHE HOTEL
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between FuelCell and PPHE is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding FuelCell Energy and PPHE HOTEL GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PPHE HOTEL GROUP 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 PPHE HOTEL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PPHE HOTEL GROUP has no effect on the direction of FuelCell Energy i.e., FuelCell Energy and PPHE HOTEL go up and down completely randomly.
Pair Corralation between FuelCell Energy and PPHE HOTEL
Assuming the 90 days trading horizon FuelCell Energy is expected to generate 6.89 times more return on investment than PPHE HOTEL. However, FuelCell Energy is 6.89 times more volatile than PPHE HOTEL GROUP. It trades about 0.18 of its potential returns per unit of risk. PPHE HOTEL GROUP is currently generating about 0.25 per unit of risk. If you would invest 708.00 in FuelCell Energy on October 11, 2024 and sell it today you would earn a total of 514.00 from holding FuelCell Energy or generate 72.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 97.37% |
| Values | Daily Returns |
FuelCell Energy vs. PPHE HOTEL GROUP
Performance |
| Timeline |
| FuelCell Energy |
| PPHE HOTEL GROUP |
FuelCell Energy and PPHE HOTEL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FuelCell Energy and PPHE HOTEL
The main advantage of trading using opposite FuelCell Energy and PPHE HOTEL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FuelCell Energy position performs unexpectedly, PPHE HOTEL 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 PPHE HOTEL will offset losses from the drop in PPHE HOTEL's long position.| FuelCell Energy vs. Delta Electronics Public | FuelCell Energy vs. Superior Plus Corp | FuelCell Energy vs. NMI Holdings | FuelCell Energy vs. SIVERS SEMICONDUCTORS AB |
| PPHE HOTEL vs. T MOBILE US | PPHE HOTEL vs. Cogent Communications Holdings | PPHE HOTEL vs. MOBILE FACTORY INC | PPHE HOTEL vs. Air Transport Services |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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