Correlation Between BRP and Fluence Energy
Can any of the company-specific risk be diversified away by investing in both BRP and Fluence 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 BRP and Fluence Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BRP Inc and Fluence Energy, you can compare the effects of market volatilities on BRP and Fluence 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 BRP with a short position of Fluence Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of BRP and Fluence Energy.
Diversification Opportunities for BRP and Fluence Energy
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BRP and Fluence is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding BRP Inc and Fluence Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fluence Energy and BRP 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 BRP Inc are associated (or correlated) with Fluence Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fluence Energy has no effect on the direction of BRP i.e., BRP and Fluence Energy go up and down completely randomly.
Pair Corralation between BRP and Fluence Energy
Given the investment horizon of 90 days BRP Inc is expected to under-perform the Fluence Energy. But the stock apears to be less risky and, when comparing its historical volatility, BRP Inc is 2.86 times less risky than Fluence Energy. The stock trades about -0.04 of its potential returns per unit of risk. The Fluence Energy is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 2,081 in Fluence Energy on August 27, 2024 and sell it today you would earn a total of 269.00 from holding Fluence Energy or generate 12.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BRP Inc vs. Fluence Energy
Performance |
| Timeline |
| BRP Inc |
| Fluence Energy |
BRP and Fluence Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BRP and Fluence Energy
The main advantage of trading using opposite BRP and Fluence Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BRP position performs unexpectedly, Fluence 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 Fluence Energy will offset losses from the drop in Fluence Energy's long position.The idea behind BRP Inc and Fluence 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.| Fluence Energy vs. Altus Power | Fluence Energy vs. Ormat Technologies | Fluence Energy vs. Enlight Renewable Energy | Fluence 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 Transaction History module to view history of all your transactions and understand their impact on performance.
Other Complementary Tools
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities |