Correlation Between FuelPositive Corp and Alfen NV
Can any of the company-specific risk be diversified away by investing in both FuelPositive Corp and Alfen NV 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 FuelPositive Corp and Alfen NV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FuelPositive Corp and Alfen NV, you can compare the effects of market volatilities on FuelPositive Corp and Alfen NV 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 FuelPositive Corp with a short position of Alfen NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of FuelPositive Corp and Alfen NV.
Diversification Opportunities for FuelPositive Corp and Alfen NV
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between FuelPositive and Alfen is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding FuelPositive Corp and Alfen NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alfen NV and FuelPositive Corp 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 FuelPositive Corp are associated (or correlated) with Alfen NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alfen NV has no effect on the direction of FuelPositive Corp i.e., FuelPositive Corp and Alfen NV go up and down completely randomly.
Pair Corralation between FuelPositive Corp and Alfen NV
Assuming the 90 days horizon FuelPositive Corp is expected to generate 5.19 times more return on investment than Alfen NV. However, FuelPositive Corp is 5.19 times more volatile than Alfen NV. It trades about 0.03 of its potential returns per unit of risk. Alfen NV is currently generating about -0.22 per unit of risk. If you would invest 2.33 in FuelPositive Corp on August 28, 2024 and sell it today you would lose (0.33) from holding FuelPositive Corp or give up 14.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FuelPositive Corp vs. Alfen NV
Performance |
| Timeline |
| FuelPositive Corp |
| Alfen NV |
FuelPositive Corp and Alfen NV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FuelPositive Corp and Alfen NV
The main advantage of trading using opposite FuelPositive Corp and Alfen NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FuelPositive Corp position performs unexpectedly, Alfen NV 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 Alfen NV will offset losses from the drop in Alfen NV's long position.| FuelPositive Corp vs. AmmPower Corp | FuelPositive Corp vs. FuelPositive Corp | FuelPositive Corp vs. Graphene Manufacturing Group | FuelPositive Corp vs. Exro Technologies |
| Alfen NV vs. Copa Holdings SA | Alfen NV vs. United Airlines Holdings | Alfen NV vs. Delta Air Lines | Alfen NV vs. SkyWest |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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