Correlation Between Shenandoah Telecommunicatio and FuelCell Energy
Can any of the company-specific risk be diversified away by investing in both Shenandoah Telecommunicatio 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 Shenandoah Telecommunicatio and FuelCell Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shenandoah Telecommunications and FuelCell Energy, you can compare the effects of market volatilities on Shenandoah Telecommunicatio 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 Shenandoah Telecommunicatio with a short position of FuelCell Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenandoah Telecommunicatio and FuelCell Energy.
Diversification Opportunities for Shenandoah Telecommunicatio and FuelCell Energy
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Shenandoah and FuelCell is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Shenandoah Telecommunications and FuelCell Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FuelCell Energy and Shenandoah Telecommunicatio 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 Shenandoah Telecommunications 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 Shenandoah Telecommunicatio i.e., Shenandoah Telecommunicatio and FuelCell Energy go up and down completely randomly.
Pair Corralation between Shenandoah Telecommunicatio and FuelCell Energy
Assuming the 90 days horizon Shenandoah Telecommunications is expected to under-perform the FuelCell Energy. But the stock apears to be less risky and, when comparing its historical volatility, Shenandoah Telecommunications is 4.17 times less risky than FuelCell Energy. The stock trades about -0.34 of its potential returns per unit of risk. The FuelCell Energy is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 960.00 in FuelCell Energy on October 28, 2024 and sell it today you would earn a total of 170.00 from holding FuelCell Energy or generate 17.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 45.0% |
| Values | Daily Returns |
Shenandoah Telecommunications vs. FuelCell Energy
Performance |
| Timeline |
| Shenandoah Telecommunicatio |
| FuelCell Energy |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Insignificant
Shenandoah Telecommunicatio and FuelCell Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shenandoah Telecommunicatio and FuelCell Energy
The main advantage of trading using opposite Shenandoah Telecommunicatio and FuelCell Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shenandoah Telecommunicatio 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.| Shenandoah Telecommunicatio vs. T Mobile | Shenandoah Telecommunicatio vs. China Mobile Limited | Shenandoah Telecommunicatio vs. Verizon Communications | Shenandoah Telecommunicatio vs. ATT Inc |
| FuelCell Energy vs. SYSTEMAIR AB | FuelCell Energy vs. Townsquare Media | FuelCell Energy vs. ALTAIR RES INC | FuelCell Energy vs. Ryanair Holdings plc |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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