Correlation Between Microvast Holdings and FuelCell Energy
Can any of the company-specific risk be diversified away by investing in both Microvast Holdings 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 Microvast Holdings and FuelCell Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microvast Holdings and FuelCell Energy, you can compare the effects of market volatilities on Microvast Holdings 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 Microvast Holdings with a short position of FuelCell Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microvast Holdings and FuelCell Energy.
Diversification Opportunities for Microvast Holdings and FuelCell Energy
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Microvast and FuelCell is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Microvast Holdings and FuelCell Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FuelCell Energy and Microvast Holdings 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 Microvast Holdings 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 Microvast Holdings i.e., Microvast Holdings and FuelCell Energy go up and down completely randomly.
Pair Corralation between Microvast Holdings and FuelCell Energy
Given the investment horizon of 90 days Microvast Holdings is expected to under-perform the FuelCell Energy. But the stock apears to be less risky and, when comparing its historical volatility, Microvast Holdings is 1.13 times less risky than FuelCell Energy. The stock trades about -0.06 of its potential returns per unit of risk. The FuelCell Energy is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 563.00 in FuelCell Energy on June 3, 2025 and sell it today you would lose (143.00) from holding FuelCell Energy or give up 25.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Microvast Holdings vs. FuelCell Energy
Performance |
| Timeline |
| Microvast Holdings |
| FuelCell Energy |
Microvast Holdings and FuelCell Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microvast Holdings and FuelCell Energy
The main advantage of trading using opposite Microvast Holdings and FuelCell Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microvast Holdings 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.| Microvast Holdings vs. Solid Power | Microvast Holdings vs. Plug Power | Microvast Holdings vs. FuelCell Energy | Microvast Holdings vs. Enovix Corp |
| FuelCell Energy vs. Bloom Energy Corp | FuelCell Energy vs. T1 Energy | FuelCell Energy vs. Sunrise New Energy | FuelCell Energy vs. Advent Technologies Holdings |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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