Correlation Between FuelCell Energy and Primorus Investments

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

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

Diversification Opportunities for FuelCell Energy and Primorus Investments

0.0

Correlation Coefficient

FuelCell Energy  Primorus Investments

Pay attention - limited upside

The 3 months correlation between FuelCell and Primorus is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding FuelCell Energy and Primorus Investments plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Primorus Investments plc 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 Primorus Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Primorus Investments plc has no effect on the direction of FuelCell Energy i.e., FuelCell Energy and Primorus Investments go up and down completely randomly.

Pair Corralation between FuelCell Energy and Primorus Investments

Assuming the 90 days trading horizon FuelCell Energy is expected to generate 2.43 times more return on investment than Primorus Investments. However, FuelCell Energy is 2.43 times more volatile than Primorus Investments plc. It trades about 0.09 of its potential returns per unit of risk. Primorus Investments plc is currently generating about 0.08 per unit of risk. If you would invest  977.00  in FuelCell Energy on October 10, 2024 and sell it today you would earn a total of  326.00  from holding FuelCell Energy or generate 33.37% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

FuelCell Energy  vs.  Primorus Investments plc

FuelCell Energy

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in FuelCell Energy are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, FuelCell Energy unveiled solid returns over the last few months and may actually be approaching a breakup point.

Primorus Investments plc

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Primorus Investments plc are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Primorus Investments unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with FuelCell Energy and Primorus Investments

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

The idea behind FuelCell Energy and Primorus Investments plc 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.

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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.