Correlation Between Fuel Tech and CO2 Solutions
Can any of the company-specific risk be diversified away by investing in both Fuel Tech and CO2 Solutions 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 CO2 Solutions into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fuel Tech and CO2 Solutions, you can compare the effects of market volatilities on Fuel Tech and CO2 Solutions 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 CO2 Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fuel Tech and CO2 Solutions.
Diversification Opportunities for Fuel Tech and CO2 Solutions
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Fuel and CO2 is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Fuel Tech and CO2 Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CO2 Solutions 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 CO2 Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CO2 Solutions has no effect on the direction of Fuel Tech i.e., Fuel Tech and CO2 Solutions go up and down completely randomly.
Pair Corralation between Fuel Tech and CO2 Solutions
Given the investment horizon of 90 days Fuel Tech is expected to generate 0.63 times more return on investment than CO2 Solutions. However, Fuel Tech is 1.59 times less risky than CO2 Solutions. It trades about -0.02 of its potential returns per unit of risk. CO2 Solutions is currently generating about -0.04 per unit of risk. If you would invest 163.00 in Fuel Tech on August 24, 2024 and sell it today you would lose (56.00) from holding Fuel Tech or give up 34.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Fuel Tech vs. CO2 Solutions
Performance |
| Timeline |
| Fuel Tech |
| CO2 Solutions |
Fuel Tech and CO2 Solutions Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fuel Tech and CO2 Solutions
The main advantage of trading using opposite Fuel Tech and CO2 Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fuel Tech position performs unexpectedly, CO2 Solutions 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 CO2 Solutions will offset losses from the drop in CO2 Solutions' long position.| Fuel Tech vs. Federal Signal | Fuel Tech vs. CECO Environmental Corp | Fuel Tech vs. Zurn Elkay Water | Fuel Tech vs. Greenlane Renewables |
| CO2 Solutions vs. TOMI Environmental Solutions | CO2 Solutions vs. Zurn Elkay Water | CO2 Solutions vs. Delta CleanTech | CO2 Solutions vs. Federal Signal |
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.
Other Complementary Tools
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Stocks Directory Find actively traded stocks across global markets | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |