Correlation Between Thor Mining and FuelCell Energy
Can any of the company-specific risk be diversified away by investing in both Thor Mining 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 Thor Mining and FuelCell Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thor Mining PLC and FuelCell Energy, you can compare the effects of market volatilities on Thor Mining 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 Thor Mining with a short position of FuelCell Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thor Mining and FuelCell Energy.
Diversification Opportunities for Thor Mining and FuelCell Energy
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Thor and FuelCell is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Thor Mining PLC and FuelCell Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FuelCell Energy and Thor Mining 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 Thor Mining PLC 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 Thor Mining i.e., Thor Mining and FuelCell Energy go up and down completely randomly.
Pair Corralation between Thor Mining and FuelCell Energy
Assuming the 90 days trading horizon Thor Mining PLC is expected to under-perform the FuelCell Energy. But the stock apears to be less risky and, when comparing its historical volatility, Thor Mining PLC is 33.27 times less risky than FuelCell Energy. The stock trades about -0.06 of its potential returns per unit of risk. The 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 |
Thor Mining PLC vs. FuelCell Energy
Performance |
| Timeline |
| Thor Mining PLC |
| FuelCell Energy |
Thor Mining and FuelCell Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thor Mining and FuelCell Energy
The main advantage of trading using opposite Thor Mining and FuelCell Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thor Mining 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.| Thor Mining vs. Monster Beverage Corp | Thor Mining vs. Tyson Foods Cl | Thor Mining vs. InterContinental Hotels Group | Thor Mining vs. Young Cos Brewery |
| 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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