Correlation Between Fluence Energy and Brookfield Renewable
Can any of the company-specific risk be diversified away by investing in both Fluence Energy and Brookfield Renewable 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 Brookfield Renewable into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fluence Energy and Brookfield Renewable Corp, you can compare the effects of market volatilities on Fluence Energy and Brookfield Renewable 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 Brookfield Renewable. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fluence Energy and Brookfield Renewable.
Diversification Opportunities for Fluence Energy and Brookfield Renewable
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fluence and Brookfield is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Fluence Energy and Brookfield Renewable Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brookfield Renewable Corp 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 Brookfield Renewable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brookfield Renewable Corp has no effect on the direction of Fluence Energy i.e., Fluence Energy and Brookfield Renewable go up and down completely randomly.
Pair Corralation between Fluence Energy and Brookfield Renewable
Given the investment horizon of 90 days Fluence Energy is expected to generate 2.14 times more return on investment than Brookfield Renewable. However, Fluence Energy is 2.14 times more volatile than Brookfield Renewable Corp. It trades about 0.03 of its potential returns per unit of risk. Brookfield Renewable Corp is currently generating about 0.05 per unit of risk. If you would invest 2,027 in Fluence Energy on August 24, 2024 and sell it today you would earn a total of 91.00 from holding Fluence Energy or generate 4.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Fluence Energy vs. Brookfield Renewable Corp
Performance |
| Timeline |
| Fluence Energy |
| Brookfield Renewable Corp |
Fluence Energy and Brookfield Renewable Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fluence Energy and Brookfield Renewable
The main advantage of trading using opposite Fluence Energy and Brookfield Renewable positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fluence Energy position performs unexpectedly, Brookfield Renewable 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 Brookfield Renewable will offset losses from the drop in Brookfield Renewable'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 |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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