Correlation Between FuelCell Energy and Sancus Lending

Can any of the company-specific risk be diversified away by investing in both FuelCell Energy and Sancus Lending 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 Sancus Lending into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between FuelCell Energy and Sancus Lending Group, you can compare the effects of market volatilities on FuelCell Energy and Sancus Lending 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 Sancus Lending. Check out your portfolio center. Please also check ongoing floating volatility patterns of FuelCell Energy and Sancus Lending.

Diversification Opportunities for FuelCell Energy and Sancus Lending

-0.48

Correlation Coefficient

FuelCell Energy  Sancus Lending

Very good diversification

The 3 months correlation between FuelCell and Sancus is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding FuelCell Energy and Sancus Lending Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sancus Lending Group 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 Sancus Lending. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sancus Lending Group has no effect on the direction of FuelCell Energy i.e., FuelCell Energy and Sancus Lending go up and down completely randomly.

Pair Corralation between FuelCell Energy and Sancus Lending

Assuming the 90 days trading horizon FuelCell Energy is expected to generate 1.28 times more return on investment than Sancus Lending. However, FuelCell Energy is 1.28 times more volatile than Sancus Lending Group. It trades about 0.03 of its potential returns per unit of risk. Sancus Lending Group is currently generating about 0.01 per unit of risk. If you would invest  969.00  in FuelCell Energy on October 25, 2024 and sell it today you would lose (76.00) from holding FuelCell Energy or give up 7.84% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.39%
Values	Daily Returns

FuelCell Energy  vs.  Sancus Lending Group

FuelCell Energy

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in FuelCell Energy are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively conflicting basic indicators, FuelCell Energy unveiled solid returns over the last few months and may actually be approaching a breakup point.

Sancus Lending Group

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Sancus Lending Group are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Sancus Lending is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with FuelCell Energy and Sancus Lending

The main advantage of trading using opposite FuelCell Energy and Sancus Lending positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FuelCell Energy position performs unexpectedly, Sancus Lending 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 Sancus Lending will offset losses from the drop in Sancus Lending's long position.

The idea behind FuelCell Energy and Sancus Lending Group pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.