Correlation Between Quantumscape Corp and FuelCell Energy

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

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

Diversification Opportunities for Quantumscape Corp and FuelCell Energy

-0.19

Correlation Coefficient

Quantumscape Corp  FuelCell Energy

Good diversification

The 3 months correlation between Quantumscape and FuelCell is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Quantumscape Corp and FuelCell Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FuelCell Energy and Quantumscape 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 Quantumscape Corp 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 Quantumscape Corp i.e., Quantumscape Corp and FuelCell Energy go up and down completely randomly.

Pair Corralation between Quantumscape Corp and FuelCell Energy

Allowing for the 90-day total investment horizon Quantumscape Corp is expected to generate 1.25 times more return on investment than FuelCell Energy. However, Quantumscape Corp is 1.25 times more volatile than FuelCell Energy. It trades about 0.19 of its potential returns per unit of risk. FuelCell Energy is currently generating about 0.0 per unit of risk. If you would invest  397.00  in Quantumscape Corp on May 18, 2025 and sell it today you would earn a total of  506.00  from holding Quantumscape Corp or generate 127.46% return on investment over 90 days.

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

Quantumscape Corp  vs.  FuelCell Energy

Quantumscape Corp

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Quantumscape Corp are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Quantumscape Corp unveiled solid returns over the last few months and may actually be approaching a breakup point.

FuelCell Energy

Risk-Adjusted Performance

Weakest

Over the last 90 days FuelCell Energy has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent technical and fundamental indicators, FuelCell Energy is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Quantumscape Corp and FuelCell Energy

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

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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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.