Correlation Between Molekule and Fuel Tech
Can any of the company-specific risk be diversified away by investing in both Molekule and Fuel Tech 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 Molekule and Fuel Tech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Molekule Group and Fuel Tech, you can compare the effects of market volatilities on Molekule and Fuel Tech 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 Molekule with a short position of Fuel Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Molekule and Fuel Tech.
Diversification Opportunities for Molekule and Fuel Tech
Modest diversification
The 3 months correlation between Molekule and Fuel is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Molekule Group and Fuel Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fuel Tech and Molekule 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 Molekule Group are associated (or correlated) with Fuel Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fuel Tech has no effect on the direction of Molekule i.e., Molekule and Fuel Tech go up and down completely randomly.
Pair Corralation between Molekule and Fuel Tech
Given the investment horizon of 90 days Molekule Group is expected to under-perform the Fuel Tech. In addition to that, Molekule is 2.21 times more volatile than Fuel Tech. It trades about -0.02 of its total potential returns per unit of risk. Fuel Tech is currently generating about -0.01 per unit of volatility. If you would invest 149.00 in Fuel Tech on August 27, 2024 and sell it today you would lose (42.00) from holding Fuel Tech or give up 28.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 31.65% |
| Values | Daily Returns |
Molekule Group vs. Fuel Tech
Performance |
| Timeline |
| Molekule Group |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Fuel Tech |
Molekule and Fuel Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Molekule and Fuel Tech
The main advantage of trading using opposite Molekule and Fuel Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Molekule position performs unexpectedly, Fuel Tech 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 Fuel Tech will offset losses from the drop in Fuel Tech's long position.| Molekule vs. Procter Gamble | Molekule vs. PennantPark Floating Rate | Molekule vs. Church Dwight | Molekule vs. Sonida Senior Living |
| Fuel Tech vs. Federal Signal | Fuel Tech vs. CECO Environmental Corp | Fuel Tech vs. Zurn Elkay Water | Fuel Tech vs. Greenlane Renewables |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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