Correlation Between Ballard Power and Fanuc

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

By analyzing existing cross correlation between Ballard Power Systems and Fanuc, you can compare the effects of market volatilities on Ballard Power and Fanuc 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 Ballard Power with a short position of Fanuc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ballard Power and Fanuc.

Diversification Opportunities for Ballard Power and Fanuc

-0.72

Correlation Coefficient

Ballard Power  Fanuc

Pay attention - limited upside

The 3 months correlation between Ballard and Fanuc is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Ballard Power Systems and Fanuc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fanuc and Ballard Power 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 Ballard Power Systems are associated (or correlated) with Fanuc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fanuc has no effect on the direction of Ballard Power i.e., Ballard Power and Fanuc go up and down completely randomly.

Pair Corralation between Ballard Power and Fanuc

Given the investment horizon of 90 days Ballard Power Systems is expected to under-perform the Fanuc. In addition to that, Ballard Power is 2.48 times more volatile than Fanuc. It trades about -0.11 of its total potential returns per unit of risk. Fanuc is currently generating about 0.11 per unit of volatility. If you would invest  1,311  in Fanuc on December 29, 2024 and sell it today you would earn a total of  148.00  from holding Fanuc or generate 11.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Ballard Power Systems  vs.  Fanuc

Ballard Power Systems

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ballard Power Systems has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's fundamental indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Fanuc

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Fanuc are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent basic indicators, Fanuc may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Ballard Power and Fanuc

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

The idea behind Ballard Power Systems and Fanuc 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..