Correlation Between Zurn Elkay and Fuel Tech
Can any of the company-specific risk be diversified away by investing in both Zurn Elkay 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 Zurn Elkay and Fuel Tech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Zurn Elkay Water and Fuel Tech, you can compare the effects of market volatilities on Zurn Elkay 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 Zurn Elkay with a short position of Fuel Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zurn Elkay and Fuel Tech.
Diversification Opportunities for Zurn Elkay and Fuel Tech
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Zurn and Fuel is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Zurn Elkay Water and Fuel Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fuel Tech and Zurn Elkay 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 Zurn Elkay Water 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 Zurn Elkay i.e., Zurn Elkay and Fuel Tech go up and down completely randomly.
Pair Corralation between Zurn Elkay and Fuel Tech
Considering the 90-day investment horizon Zurn Elkay Water is expected to generate 0.71 times more return on investment than Fuel Tech. However, Zurn Elkay Water is 1.4 times less risky than Fuel Tech. It trades about 0.08 of its potential returns per unit of risk. Fuel Tech is currently generating about 0.01 per unit of risk. If you would invest 2,958 in Zurn Elkay Water on August 27, 2024 and sell it today you would earn a total of 1,035 from holding Zurn Elkay Water or generate 34.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zurn Elkay Water vs. Fuel Tech
Performance |
| Timeline |
| Zurn Elkay Water |
| Fuel Tech |
Zurn Elkay and Fuel Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zurn Elkay and Fuel Tech
The main advantage of trading using opposite Zurn Elkay and Fuel Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zurn Elkay 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.| Zurn Elkay vs. Energy Recovery | Zurn Elkay vs. CECO Environmental Corp | Zurn Elkay vs. 374Water Common Stock | Zurn Elkay vs. Federal Signal |
| 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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