Correlation Between Atlantica Sustainable and Fusion Fuel
Can any of the company-specific risk be diversified away by investing in both Atlantica Sustainable and Fusion Fuel 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 Atlantica Sustainable and Fusion Fuel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Atlantica Sustainable Infrastructure and Fusion Fuel Green, you can compare the effects of market volatilities on Atlantica Sustainable and Fusion Fuel 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 Atlantica Sustainable with a short position of Fusion Fuel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atlantica Sustainable and Fusion Fuel.
Diversification Opportunities for Atlantica Sustainable and Fusion Fuel
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Atlantica and Fusion is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Atlantica Sustainable Infrastr and Fusion Fuel Green in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fusion Fuel Green and Atlantica Sustainable 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 Atlantica Sustainable Infrastructure are associated (or correlated) with Fusion Fuel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fusion Fuel Green has no effect on the direction of Atlantica Sustainable i.e., Atlantica Sustainable and Fusion Fuel go up and down completely randomly.
Pair Corralation between Atlantica Sustainable and Fusion Fuel
Allowing for the 90-day total investment horizon Atlantica Sustainable is expected to generate 10.36 times less return on investment than Fusion Fuel. But when comparing it to its historical volatility, Atlantica Sustainable Infrastructure is 331.92 times less risky than Fusion Fuel. It trades about 0.49 of its potential returns per unit of risk. Fusion Fuel Green is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 62.00 in Fusion Fuel Green on November 1, 2024 and sell it today you would lose (20.04) from holding Fusion Fuel Green or give up 32.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 48.33% |
| Values | Daily Returns |
Atlantica Sustainable Infrastr vs. Fusion Fuel Green
Performance |
| Timeline |
| Atlantica Sustainable |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Strong
| Fusion Fuel Green |
Atlantica Sustainable and Fusion Fuel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Atlantica Sustainable and Fusion Fuel
The main advantage of trading using opposite Atlantica Sustainable and Fusion Fuel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atlantica Sustainable position performs unexpectedly, Fusion Fuel 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 Fusion Fuel will offset losses from the drop in Fusion Fuel's long position.| Atlantica Sustainable vs. Clearway Energy | Atlantica Sustainable vs. Brookfield Renewable Corp | Atlantica Sustainable vs. Nextera Energy Partners | Atlantica Sustainable vs. Brookfield Renewable Partners |
| Fusion Fuel vs. Advent Technologies Holdings | Fusion Fuel vs. Fluence Energy | Fusion Fuel vs. Enlight Renewable Energy | Fusion Fuel vs. Renew Energy Global |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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