Correlation Between Fuel Tech and ADES International
Can any of the company-specific risk be diversified away by investing in both Fuel Tech and ADES International 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 Fuel Tech and ADES International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fuel Tech and ADES International Holding, you can compare the effects of market volatilities on Fuel Tech and ADES International 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 Fuel Tech with a short position of ADES International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fuel Tech and ADES International.
Diversification Opportunities for Fuel Tech and ADES International
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Fuel and ADES is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Fuel Tech and ADES International Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ADES International and Fuel Tech 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 Fuel Tech are associated (or correlated) with ADES International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ADES International has no effect on the direction of Fuel Tech i.e., Fuel Tech and ADES International go up and down completely randomly.
Pair Corralation between Fuel Tech and ADES International
If you would invest 102.00 in Fuel Tech on August 23, 2024 and sell it today you would earn a total of 13.00 from holding Fuel Tech or generate 12.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 1.56% |
| Values | Daily Returns |
Fuel Tech vs. ADES International Holding
Performance |
| Timeline |
| Fuel Tech |
| ADES International |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Fuel Tech and ADES International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fuel Tech and ADES International
The main advantage of trading using opposite Fuel Tech and ADES International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fuel Tech position performs unexpectedly, ADES International 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 ADES International will offset losses from the drop in ADES International's long position.| Fuel Tech vs. Federal Signal | Fuel Tech vs. Zurn Elkay Water | Fuel Tech vs. Energy Recovery | Fuel Tech vs. 374Water Common Stock |
| ADES International vs. Vow ASA | ADES International vs. Seychelle Environmtl | ADES International vs. Eestech | ADES International vs. Energy and Water |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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