Correlation Between FutureFuel Corp and HydroGraph Clean

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

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

Diversification Opportunities for FutureFuel Corp and HydroGraph Clean

0.0

Correlation Coefficient

FutureFuel Corp  HydroGraph Clean

Pay attention - limited upside

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

Pair Corralation between FutureFuel Corp and HydroGraph Clean

If you would invest (100.00) in HydroGraph Clean Power on December 1, 2024 and sell it today you would earn a total of  100.00  from holding HydroGraph Clean Power or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

FutureFuel Corp  vs.  HydroGraph Clean Power

FutureFuel Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days FutureFuel Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's technical and fundamental indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

HydroGraph Clean Power

Risk-Adjusted Performance

Very Weak

Over the last 90 days HydroGraph Clean Power has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, HydroGraph Clean is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with FutureFuel Corp and HydroGraph Clean

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

The idea behind FutureFuel Corp and HydroGraph Clean Power 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.