Correlation Between Prysmian SpA and FuelCell Energy
Can any of the company-specific risk be diversified away by investing in both Prysmian SpA 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 Prysmian SpA and FuelCell Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prysmian SpA and FuelCell Energy, you can compare the effects of market volatilities on Prysmian SpA 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 Prysmian SpA with a short position of FuelCell Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prysmian SpA and FuelCell Energy.
Diversification Opportunities for Prysmian SpA and FuelCell Energy
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Prysmian and FuelCell is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Prysmian SpA and FuelCell Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FuelCell Energy and Prysmian SpA 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 Prysmian SpA 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 Prysmian SpA i.e., Prysmian SpA and FuelCell Energy go up and down completely randomly.
Pair Corralation between Prysmian SpA and FuelCell Energy
Assuming the 90 days horizon Prysmian SpA is expected to generate 0.94 times more return on investment than FuelCell Energy. However, Prysmian SpA is 1.07 times less risky than FuelCell Energy. It trades about 0.05 of its potential returns per unit of risk. FuelCell Energy is currently generating about -0.04 per unit of risk. If you would invest 3,026 in Prysmian SpA on January 26, 2024 and sell it today you would earn a total of 2,223 from holding Prysmian SpA or generate 73.46% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Prysmian SpA vs. FuelCell Energy
Performance |
Timeline |
Prysmian SpA |
FuelCell Energy |
Prysmian SpA and FuelCell Energy Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Prysmian SpA and FuelCell Energy
The main advantage of trading using opposite Prysmian SpA and FuelCell Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prysmian SpA 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.Prysmian SpA vs. Sunrise New Energy | Prysmian SpA vs. Alfen NV | Prysmian SpA vs. ADS TEC ENERGY PLC | Prysmian SpA vs. Ads Tec Energy |
FuelCell Energy vs. Kimball Electronics | FuelCell Energy vs. Hollysys Automation Technologies | FuelCell Energy vs. Hayward Holdings | FuelCell Energy vs. nVent Electric PLC |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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