Correlation Between Symphony Environmental and FuelCell Energy
Can any of the company-specific risk be diversified away by investing in both Symphony Environmental 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 Symphony Environmental and FuelCell Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Symphony Environmental Technologies and FuelCell Energy, you can compare the effects of market volatilities on Symphony Environmental 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 Symphony Environmental with a short position of FuelCell Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Symphony Environmental and FuelCell Energy.
Diversification Opportunities for Symphony Environmental and FuelCell Energy
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Symphony and FuelCell is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Symphony Environmental Technol and FuelCell Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FuelCell Energy and Symphony Environmental 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 Symphony Environmental Technologies 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 Symphony Environmental i.e., Symphony Environmental and FuelCell Energy go up and down completely randomly.
Pair Corralation between Symphony Environmental and FuelCell Energy
Assuming the 90 days trading horizon Symphony Environmental is expected to generate 34.95 times less return on investment than FuelCell Energy. But when comparing it to its historical volatility, Symphony Environmental Technologies is 24.15 times less risky than FuelCell Energy. It trades about 0.08 of its potential returns per unit of risk. FuelCell Energy is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 1,529 in FuelCell Energy on October 25, 2024 and sell it today you would lose (636.00) from holding FuelCell Energy or give up 41.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.41% |
| Values | Daily Returns |
Symphony Environmental Technol vs. FuelCell Energy
Performance |
| Timeline |
| Symphony Environmental |
| FuelCell Energy |
Symphony Environmental and FuelCell Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Symphony Environmental and FuelCell Energy
The main advantage of trading using opposite Symphony Environmental and FuelCell Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Symphony Environmental 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.| Symphony Environmental vs. Prosiebensat 1 Media | Symphony Environmental vs. LBG Media PLC | Symphony Environmental vs. Hollywood Bowl Group | Symphony Environmental vs. One Media iP |
| FuelCell Energy vs. Taiwan Semiconductor Manufacturing | FuelCell Energy vs. Jupiter Fund Management | FuelCell Energy vs. JB Hunt Transport | FuelCell Energy vs. EJF Investments |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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