Correlation Between FuelCell Energy and INTERCONT HOTELS
Can any of the company-specific risk be diversified away by investing in both FuelCell Energy and INTERCONT HOTELS 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 INTERCONT HOTELS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FuelCell Energy and INTERCONT HOTELS, you can compare the effects of market volatilities on FuelCell Energy and INTERCONT HOTELS 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 INTERCONT HOTELS. Check out your portfolio center. Please also check ongoing floating volatility patterns of FuelCell Energy and INTERCONT HOTELS.
Diversification Opportunities for FuelCell Energy and INTERCONT HOTELS
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between FuelCell and INTERCONT is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding FuelCell Energy and INTERCONT HOTELS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INTERCONT HOTELS 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 INTERCONT HOTELS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INTERCONT HOTELS has no effect on the direction of FuelCell Energy i.e., FuelCell Energy and INTERCONT HOTELS go up and down completely randomly.
Pair Corralation between FuelCell Energy and INTERCONT HOTELS
Assuming the 90 days trading horizon FuelCell Energy is expected to generate 7.72 times more return on investment than INTERCONT HOTELS. However, FuelCell Energy is 7.72 times more volatile than INTERCONT HOTELS. It trades about 0.18 of its potential returns per unit of risk. INTERCONT HOTELS is currently generating about 0.1 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 | Insignificant |
| Accuracy | 97.37% |
| Values | Daily Returns |
FuelCell Energy vs. INTERCONT HOTELS
Performance |
| Timeline |
| FuelCell Energy |
| INTERCONT HOTELS |
FuelCell Energy and INTERCONT HOTELS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FuelCell Energy and INTERCONT HOTELS
The main advantage of trading using opposite FuelCell Energy and INTERCONT HOTELS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FuelCell Energy position performs unexpectedly, INTERCONT HOTELS 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 INTERCONT HOTELS will offset losses from the drop in INTERCONT HOTELS'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 |
| INTERCONT HOTELS vs. Packaging of | INTERCONT HOTELS vs. ERSTE GP BNK | INTERCONT HOTELS vs. W R Berkley | INTERCONT HOTELS vs. News Corporation |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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