Correlation Between Danimer Scientific and FutureFuel Corp
Can any of the company-specific risk be diversified away by investing in both Danimer Scientific and FutureFuel Corp 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 Danimer Scientific and FutureFuel Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Danimer Scientific and FutureFuel Corp, you can compare the effects of market volatilities on Danimer Scientific and FutureFuel Corp 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 Danimer Scientific with a short position of FutureFuel Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Danimer Scientific and FutureFuel Corp.
Diversification Opportunities for Danimer Scientific and FutureFuel Corp
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Danimer and FutureFuel is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Danimer Scientific and FutureFuel Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FutureFuel Corp and Danimer Scientific 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 Danimer Scientific are associated (or correlated) with FutureFuel Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FutureFuel Corp has no effect on the direction of Danimer Scientific i.e., Danimer Scientific and FutureFuel Corp go up and down completely randomly.
Pair Corralation between Danimer Scientific and FutureFuel Corp
Given the investment horizon of 90 days Danimer Scientific is expected to under-perform the FutureFuel Corp. In addition to that, Danimer Scientific is 2.05 times more volatile than FutureFuel Corp. It trades about -0.02 of its total potential returns per unit of risk. FutureFuel Corp is currently generating about 0.01 per unit of volatility. If you would invest 661.00 in FutureFuel Corp on January 25, 2024 and sell it today you would lose (101.00) from holding FutureFuel Corp or give up 15.28% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Danimer Scientific vs. FutureFuel Corp
Performance |
Timeline |
Danimer Scientific |
FutureFuel Corp |
Danimer Scientific and FutureFuel Corp Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Danimer Scientific and FutureFuel Corp
The main advantage of trading using opposite Danimer Scientific and FutureFuel Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Danimer Scientific position performs unexpectedly, FutureFuel Corp 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 FutureFuel Corp will offset losses from the drop in FutureFuel Corp's long position.Danimer Scientific vs. Cabot | Danimer Scientific vs. Oil Dri | Danimer Scientific vs. Orion Engineered Carbons | Danimer Scientific vs. Ecovyst |
FutureFuel Corp vs. Cabot | FutureFuel Corp vs. Oil Dri | FutureFuel Corp vs. Orion Engineered Carbons | FutureFuel Corp vs. Ecovyst |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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