Correlation Between FuelCell Energy and AZZ Incorporated
Can any of the company-specific risk be diversified away by investing in both FuelCell Energy and AZZ Incorporated 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 FuelCell Energy and AZZ Incorporated into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FuelCell Energy and AZZ Incorporated, you can compare the effects of market volatilities on FuelCell Energy and AZZ Incorporated 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 FuelCell Energy with a short position of AZZ Incorporated. Check out your portfolio center. Please also check ongoing floating volatility patterns of FuelCell Energy and AZZ Incorporated.
Diversification Opportunities for FuelCell Energy and AZZ Incorporated
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between FuelCell and AZZ is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding FuelCell Energy and AZZ Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AZZ Incorporated and FuelCell Energy 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 FuelCell Energy are associated (or correlated) with AZZ Incorporated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AZZ Incorporated has no effect on the direction of FuelCell Energy i.e., FuelCell Energy and AZZ Incorporated go up and down completely randomly.
Pair Corralation between FuelCell Energy and AZZ Incorporated
Given the investment horizon of 90 days FuelCell Energy is expected to under-perform the AZZ Incorporated. In addition to that, FuelCell Energy is 2.22 times more volatile than AZZ Incorporated. It trades about -0.2 of its total potential returns per unit of risk. AZZ Incorporated is currently generating about 0.17 per unit of volatility. If you would invest 7,639 in AZZ Incorporated on January 26, 2024 and sell it today you would earn a total of 604.00 from holding AZZ Incorporated or generate 7.91% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
FuelCell Energy vs. AZZ Incorporated
Performance |
Timeline |
FuelCell Energy |
AZZ Incorporated |
FuelCell Energy and AZZ Incorporated Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with FuelCell Energy and AZZ Incorporated
The main advantage of trading using opposite FuelCell Energy and AZZ Incorporated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FuelCell Energy position performs unexpectedly, AZZ Incorporated 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 AZZ Incorporated will offset losses from the drop in AZZ Incorporated's long position.FuelCell Energy vs. Bloom Energy Corp | FuelCell Energy vs. Microvast Holdings | FuelCell Energy vs. Solid Power | FuelCell Energy vs. Enovix Corp |
AZZ Incorporated vs. Maximus | AZZ Incorporated vs. ABM Industries Incorporated | AZZ Incorporated vs. CBIZ Inc | AZZ Incorporated vs. Cass Information Systems |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
Other Complementary Tools
ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
Share Portfolio Track or share privately all of your investments from the convenience of any device | |
ETFs Find actively traded Exchange Traded Funds (ETF) from around the world |