Correlation Between Ocean Power and Fuel Tech
Can any of the company-specific risk be diversified away by investing in both Ocean Power 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 Ocean Power and Fuel Tech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ocean Power Technologies and Fuel Tech, you can compare the effects of market volatilities on Ocean Power 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 Ocean Power with a short position of Fuel Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ocean Power and Fuel Tech.
Diversification Opportunities for Ocean Power and Fuel Tech
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ocean and Fuel is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Ocean Power Technologies and Fuel Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fuel Tech and Ocean Power 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 Ocean Power Technologies 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 Ocean Power i.e., Ocean Power and Fuel Tech go up and down completely randomly.
Pair Corralation between Ocean Power and Fuel Tech
Given the investment horizon of 90 days Ocean Power Technologies is expected to under-perform the Fuel Tech. In addition to that, Ocean Power is 4.06 times more volatile than Fuel Tech. It trades about 0.0 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 107.00 in Fuel Tech on August 27, 2024 and sell it today you would earn a total of 0.00 from holding Fuel Tech or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ocean Power Technologies vs. Fuel Tech
Performance |
| Timeline |
| Ocean Power Technologies |
| Fuel Tech |
Ocean Power and Fuel Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ocean Power and Fuel Tech
The main advantage of trading using opposite Ocean Power and Fuel Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ocean Power 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.| Ocean Power vs. Pioneer Power Solutions | Ocean Power vs. CBAK Energy Technology | Ocean Power vs. Ideal Power | Ocean Power vs. Expion360 |
| 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
Other Complementary Tools
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets |