Correlation Between Fluence Energy and ESS Tech
Can any of the company-specific risk be diversified away by investing in both Fluence Energy and ESS Tech 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 ESS Tech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fluence Energy and ESS Tech, you can compare the effects of market volatilities on Fluence Energy and ESS Tech 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 ESS Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fluence Energy and ESS Tech.
Diversification Opportunities for Fluence Energy and ESS Tech
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Fluence and ESS is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Fluence Energy and ESS Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ESS Tech 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 ESS Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ESS Tech has no effect on the direction of Fluence Energy i.e., Fluence Energy and ESS Tech go up and down completely randomly.
Pair Corralation between Fluence Energy and ESS Tech
Given the investment horizon of 90 days Fluence Energy is expected to generate 0.49 times more return on investment than ESS Tech. However, Fluence Energy is 2.03 times less risky than ESS Tech. It trades about 0.14 of its potential returns per unit of risk. ESS Tech is currently generating about -0.1 per unit of risk. 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 | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fluence Energy vs. ESS Tech
Performance |
| Timeline |
| Fluence Energy |
| ESS Tech |
Fluence Energy and ESS Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fluence Energy and ESS Tech
The main advantage of trading using opposite Fluence Energy and ESS Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fluence Energy position performs unexpectedly, ESS Tech 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 ESS Tech will offset losses from the drop in ESS Tech'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 |
| ESS Tech vs. Fluence Energy | ESS Tech vs. Solid Power | ESS Tech vs. Eos Energy Enterprises | ESS Tech vs. FREYR Battery SA |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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