Correlation Between Europac Gold and Fuel Tech

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

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

Diversification Opportunities for Europac Gold and Fuel Tech

0.84

Correlation Coefficient

Europac Gold  Fuel Tech

Very poor diversification

The 3 months correlation between Europac and Fuel is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Europac Gold Fund and Fuel Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fuel Tech and Europac Gold 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 Europac Gold Fund 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 Europac Gold i.e., Europac Gold and Fuel Tech go up and down completely randomly.

Pair Corralation between Europac Gold and Fuel Tech

Assuming the 90 days horizon Europac Gold is expected to generate 9.3 times less return on investment than Fuel Tech. But when comparing it to its historical volatility, Europac Gold Fund is 3.62 times less risky than Fuel Tech. It trades about 0.1 of its potential returns per unit of risk. Fuel Tech is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest  97.00  in Fuel Tech on May 5, 2025 and sell it today you would earn a total of  160.00  from holding Fuel Tech or generate 164.95% return on investment over 90 days.

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

Europac Gold Fund  vs.  Fuel Tech

Europac Gold

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Europac Gold Fund are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Europac Gold may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Fuel Tech

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Fuel Tech are ranked lower than 20 (%) 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 Europac Gold and Fuel Tech

The main advantage of trading using opposite Europac Gold and Fuel Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Europac Gold 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 Europac Gold Fund 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.

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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.