Correlation Between Vow ASA and Fuel Tech
Can any of the company-specific risk be diversified away by investing in both Vow ASA 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 Vow ASA and Fuel Tech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vow ASA and Fuel Tech, you can compare the effects of market volatilities on Vow ASA 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 Vow ASA with a short position of Fuel Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vow ASA and Fuel Tech.
Diversification Opportunities for Vow ASA and Fuel Tech
Good diversification
The 3 months correlation between Vow and Fuel is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Vow ASA and Fuel Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fuel Tech and Vow ASA 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 Vow ASA 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 Vow ASA i.e., Vow ASA and Fuel Tech go up and down completely randomly.
Pair Corralation between Vow ASA and Fuel Tech
If you would invest 104.00 in Fuel Tech on October 21, 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 | 90.48% |
| Values | Daily Returns |
Vow ASA vs. Fuel Tech
Performance |
| Timeline |
| Vow ASA |
| Fuel Tech |
Vow ASA and Fuel Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vow ASA and Fuel Tech
The main advantage of trading using opposite Vow ASA and Fuel Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vow ASA 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.| Vow ASA vs. Eestech | Vow ASA vs. Energy and Water | Vow ASA vs. One World Universe | Vow ASA vs. Bion Environmental Technologies |
| 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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