Correlation Between FuelCell Energy and SWISS WATER
Can any of the company-specific risk be diversified away by investing in both FuelCell Energy and SWISS WATER 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 SWISS WATER into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FuelCell Energy and SWISS WATER DECAFFCOFFEE, you can compare the effects of market volatilities on FuelCell Energy and SWISS WATER 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 SWISS WATER. Check out your portfolio center. Please also check ongoing floating volatility patterns of FuelCell Energy and SWISS WATER.
Diversification Opportunities for FuelCell Energy and SWISS WATER
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between FuelCell and SWISS is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding FuelCell Energy and SWISS WATER DECAFFCOFFEE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SWISS WATER DECAFFCOFFEE 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 SWISS WATER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SWISS WATER DECAFFCOFFEE has no effect on the direction of FuelCell Energy i.e., FuelCell Energy and SWISS WATER go up and down completely randomly.
Pair Corralation between FuelCell Energy and SWISS WATER
Assuming the 90 days trading horizon FuelCell Energy is expected to under-perform the SWISS WATER. In addition to that, FuelCell Energy is 2.49 times more volatile than SWISS WATER DECAFFCOFFEE. It trades about -0.04 of its total potential returns per unit of risk. SWISS WATER DECAFFCOFFEE is currently generating about 0.03 per unit of volatility. If you would invest 185.00 in SWISS WATER DECAFFCOFFEE on October 16, 2024 and sell it today you would earn a total of 53.00 from holding SWISS WATER DECAFFCOFFEE or generate 28.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
FuelCell Energy vs. SWISS WATER DECAFFCOFFEE
Performance |
| Timeline |
| FuelCell Energy |
| SWISS WATER DECAFFCOFFEE |
FuelCell Energy and SWISS WATER Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FuelCell Energy and SWISS WATER
The main advantage of trading using opposite FuelCell Energy and SWISS WATER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FuelCell Energy position performs unexpectedly, SWISS WATER 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 SWISS WATER will offset losses from the drop in SWISS WATER's long position.| FuelCell Energy vs. SWISS WATER DECAFFCOFFEE | FuelCell Energy vs. United Breweries Co | FuelCell Energy vs. ETFS Coffee ETC | FuelCell Energy vs. BJs Restaurants |
| SWISS WATER vs. Cleanaway Waste Management | SWISS WATER vs. Jupiter Fund Management | SWISS WATER vs. Gladstone Investment | SWISS WATER vs. Apollo Investment 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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