Correlation Between NVIDIA and FuelCell Energy
Can any of the company-specific risk be diversified away by investing in both NVIDIA 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 NVIDIA and FuelCell Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NVIDIA and FuelCell Energy, you can compare the effects of market volatilities on NVIDIA 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 NVIDIA with a short position of FuelCell Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of NVIDIA and FuelCell Energy.
Diversification Opportunities for NVIDIA and FuelCell Energy
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NVIDIA and FuelCell is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding NVIDIA and FuelCell Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FuelCell Energy and NVIDIA 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 NVIDIA 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 NVIDIA i.e., NVIDIA and FuelCell Energy go up and down completely randomly.
Pair Corralation between NVIDIA and FuelCell Energy
Assuming the 90 days trading horizon NVIDIA is expected to generate 0.48 times more return on investment than FuelCell Energy. However, NVIDIA is 2.07 times less risky than FuelCell Energy. It trades about 0.16 of its potential returns per unit of risk. FuelCell Energy is currently generating about -0.03 per unit of risk. If you would invest 1,594 in NVIDIA on October 11, 2024 and sell it today you would earn a total of 12,036 from holding NVIDIA or generate 755.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
NVIDIA vs. FuelCell Energy
Performance |
| Timeline |
| NVIDIA |
| FuelCell Energy |
NVIDIA and FuelCell Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NVIDIA and FuelCell Energy
The main advantage of trading using opposite NVIDIA and FuelCell Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NVIDIA 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.| NVIDIA vs. AEON STORES | NVIDIA vs. GALENA MINING LTD | NVIDIA vs. Calibre Mining Corp | NVIDIA vs. MAGNUM MINING EXP |
| FuelCell Energy vs. Host Hotels Resorts | FuelCell Energy vs. ZINC MEDIA GR | FuelCell Energy vs. INTERCONT HOTELS | FuelCell Energy vs. Dalata Hotel Group |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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