Correlation Between Aqua Metals and Fuel Tech

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

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

Diversification Opportunities for Aqua Metals and Fuel Tech

-0.93

Correlation Coefficient

Aqua Metals  Fuel Tech

Pay attention - limited upside

The 3 months correlation between Aqua and Fuel is -0.93. Overlapping area represents the amount of risk that can be diversified away by holding Aqua Metals and Fuel Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fuel Tech and Aqua Metals 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 Aqua Metals are associated (or correlated) with Fuel Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fuel Tech has no effect on the direction of Aqua Metals i.e., Aqua Metals and Fuel Tech go up and down completely randomly.

Pair Corralation between Aqua Metals and Fuel Tech

Given the investment horizon of 90 days Aqua Metals is expected to under-perform the Fuel Tech. In addition to that, Aqua Metals is 1.12 times more volatile than Fuel Tech. It trades about -0.15 of its total potential returns per unit of risk. Fuel Tech is currently generating about 0.29 per unit of volatility. If you would invest  95.00  in Fuel Tech on May 7, 2025 and sell it today you would earn a total of  185.00  from holding Fuel Tech or generate 194.74% return on investment over 90 days.

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

Aqua Metals  vs.  Fuel Tech

Aqua Metals

Risk-Adjusted Performance

Very Weak

Over the last 90 days Aqua Metals 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 primary indicators remain comparatively stable which may send shares a bit higher in September 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Fuel Tech

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Fuel Tech are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. Despite quite inconsistent technical and fundamental indicators, Fuel Tech disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Aqua Metals and Fuel Tech

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

The idea behind Aqua Metals and Fuel Tech 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.