Correlation Between YASKAWA ELEC and FuelCell Energy
Can any of the company-specific risk be diversified away by investing in both YASKAWA ELEC 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 YASKAWA ELEC and FuelCell Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between YASKAWA ELEC UNSP and FuelCell Energy, you can compare the effects of market volatilities on YASKAWA ELEC 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 YASKAWA ELEC with a short position of FuelCell Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of YASKAWA ELEC and FuelCell Energy.
Diversification Opportunities for YASKAWA ELEC and FuelCell Energy
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between YASKAWA and FuelCell is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding YASKAWA ELEC UNSP and FuelCell Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FuelCell Energy and YASKAWA ELEC 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 YASKAWA ELEC UNSP 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 YASKAWA ELEC i.e., YASKAWA ELEC and FuelCell Energy go up and down completely randomly.
Pair Corralation between YASKAWA ELEC and FuelCell Energy
Assuming the 90 days trading horizon YASKAWA ELEC is expected to generate 5.48 times less return on investment than FuelCell Energy. But when comparing it to its historical volatility, YASKAWA ELEC UNSP is 4.18 times less risky than FuelCell Energy. It trades about 0.06 of its potential returns per unit of risk. FuelCell Energy is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,208 in FuelCell Energy on October 12, 2024 and sell it today you would earn a total of 58.00 from holding FuelCell Energy or generate 4.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.12% |
| Values | Daily Returns |
YASKAWA ELEC UNSP vs. FuelCell Energy
Performance |
| Timeline |
| YASKAWA ELEC UNSP |
| FuelCell Energy |
YASKAWA ELEC and FuelCell Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with YASKAWA ELEC and FuelCell Energy
The main advantage of trading using opposite YASKAWA ELEC and FuelCell Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if YASKAWA ELEC 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.| YASKAWA ELEC vs. United Breweries Co | YASKAWA ELEC vs. De Grey Mining | YASKAWA ELEC vs. Western Copper and | YASKAWA ELEC vs. Harmony Gold Mining |
| FuelCell Energy vs. Delta Electronics Public | FuelCell Energy vs. Superior Plus Corp | FuelCell Energy vs. NMI Holdings | FuelCell Energy vs. SIVERS SEMICONDUCTORS AB |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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