Correlation Between Supply@Me Capital and FuelCell Energy

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

By analyzing existing cross correlation between SupplyMe Capital PLC and FuelCell Energy, you can compare the effects of market volatilities on Supply@Me Capital 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 Supply@Me Capital with a short position of FuelCell Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Supply@Me Capital and FuelCell Energy.

Diversification Opportunities for Supply@Me Capital and FuelCell Energy

-0.24

Correlation Coefficient

Supply@Me Capital  FuelCell Energy

Very good diversification

The 3 months correlation between Supply@Me and FuelCell is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding SupplyMe Capital PLC and FuelCell Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FuelCell Energy and Supply@Me Capital 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 SupplyMe Capital PLC 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 Supply@Me Capital i.e., Supply@Me Capital and FuelCell Energy go up and down completely randomly.

Pair Corralation between Supply@Me Capital and FuelCell Energy

Assuming the 90 days trading horizon SupplyMe Capital PLC is expected to generate 3.31 times more return on investment than FuelCell Energy. However, Supply@Me Capital is 3.31 times more volatile than FuelCell Energy. It trades about 0.09 of its potential returns per unit of risk. FuelCell Energy is currently generating about -0.11 per unit of risk. If you would invest  0.30  in SupplyMe Capital PLC on December 2, 2024 and sell it today you would earn a total of  0.02  from holding SupplyMe Capital PLC or generate 6.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	65.08%
Values	Daily Returns

SupplyMe Capital PLC  vs.  FuelCell Energy

SupplyMe Capital PLC

Risk-Adjusted Performance

Modest

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

FuelCell Energy

Risk-Adjusted Performance

Very Weak

Over the last 90 days FuelCell Energy has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Supply@Me Capital and FuelCell Energy

The main advantage of trading using opposite Supply@Me Capital and FuelCell Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Supply@Me Capital 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.

The idea behind SupplyMe Capital PLC and FuelCell Energy 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.