Correlation Between FREYR Battery and FuelCell Energy
Can any of the company-specific risk be diversified away by investing in both FREYR Battery and FuelCell Energy 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 FREYR Battery and FuelCell Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FREYR Battery SA and FuelCell Energy, you can compare the effects of market volatilities on FREYR Battery and FuelCell Energy 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 FREYR Battery with a short position of FuelCell Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of FREYR Battery and FuelCell Energy.
Diversification Opportunities for FREYR Battery and FuelCell Energy
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between FREYR and FuelCell is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding FREYR Battery SA and FuelCell Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FuelCell Energy and FREYR Battery 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 FREYR Battery SA are associated (or correlated) with FuelCell Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FuelCell Energy has no effect on the direction of FREYR Battery i.e., FREYR Battery and FuelCell Energy go up and down completely randomly.
Pair Corralation between FREYR Battery and FuelCell Energy
Given the investment horizon of 90 days FREYR Battery SA is expected to generate 1.22 times more return on investment than FuelCell Energy. However, FREYR Battery is 1.22 times more volatile than FuelCell Energy. It trades about -0.17 of its potential returns per unit of risk. FuelCell Energy is currently generating about -0.23 per unit of risk. If you would invest 249.00 in FREYR Battery SA on November 18, 2024 and sell it today you would lose (43.00) from holding FREYR Battery SA or give up 17.27% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FREYR Battery SA vs. FuelCell Energy
Performance |
| Timeline |
| FREYR Battery SA |
| FuelCell Energy |
FREYR Battery and FuelCell Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FREYR Battery and FuelCell Energy
The main advantage of trading using opposite FREYR Battery and FuelCell Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FREYR Battery position performs unexpectedly, FuelCell Energy 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 FuelCell Energy will offset losses from the drop in FuelCell Energy's long position.| FREYR Battery vs. Solid Power | FREYR Battery vs. Enovix Corp | FREYR Battery vs. Microvast Holdings | FREYR Battery vs. LiCycle Holdings Corp |
| FuelCell Energy vs. Bloom Energy Corp | FuelCell Energy vs. Microvast Holdings | FuelCell Energy vs. Solid Power | FuelCell Energy 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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