Correlation Between Fluence Energy and Algonquin Power
Can any of the company-specific risk be diversified away by investing in both Fluence Energy and Algonquin Power 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 Fluence Energy and Algonquin Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fluence Energy and Algonquin Power Utilities, you can compare the effects of market volatilities on Fluence Energy and Algonquin Power 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 Fluence Energy with a short position of Algonquin Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fluence Energy and Algonquin Power.
Diversification Opportunities for Fluence Energy and Algonquin Power
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Fluence and Algonquin is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Fluence Energy and Algonquin Power Utilities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Algonquin Power Utilities and Fluence Energy 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 Fluence Energy are associated (or correlated) with Algonquin Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Algonquin Power Utilities has no effect on the direction of Fluence Energy i.e., Fluence Energy and Algonquin Power go up and down completely randomly.
Pair Corralation between Fluence Energy and Algonquin Power
Given the investment horizon of 90 days Fluence Energy is expected to generate 2.4 times more return on investment than Algonquin Power. However, Fluence Energy is 2.4 times more volatile than Algonquin Power Utilities. It trades about 0.01 of its potential returns per unit of risk. Algonquin Power Utilities is currently generating about -0.05 per unit of risk. If you would invest 2,574 in Fluence Energy on September 1, 2024 and sell it today you would lose (693.00) from holding Fluence Energy or give up 26.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fluence Energy vs. Algonquin Power Utilities
Performance |
| Timeline |
| Fluence Energy |
| Algonquin Power Utilities |
Fluence Energy and Algonquin Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fluence Energy and Algonquin Power
The main advantage of trading using opposite Fluence Energy and Algonquin Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fluence Energy position performs unexpectedly, Algonquin Power 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 Algonquin Power will offset losses from the drop in Algonquin Power's long position.| Fluence Energy vs. Altus Power | Fluence Energy vs. Ormat Technologies | Fluence Energy vs. Enlight Renewable Energy | Fluence Energy vs. Advent Technologies Holdings |
| Algonquin Power vs. Brookfield Renewable Corp | Algonquin Power vs. Nextera Energy Partners | Algonquin Power vs. Clearway Energy Class | Algonquin Power vs. Atlantica Sustainable Infrastructure |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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