Correlation Between Fluence Energy and Kenon Holdings
Can any of the company-specific risk be diversified away by investing in both Fluence Energy and Kenon Holdings 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 Kenon Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fluence Energy and Kenon Holdings, you can compare the effects of market volatilities on Fluence Energy and Kenon Holdings 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 Kenon Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fluence Energy and Kenon Holdings.
Diversification Opportunities for Fluence Energy and Kenon Holdings
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Fluence and Kenon is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Fluence Energy and Kenon Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kenon Holdings 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 Kenon Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kenon Holdings has no effect on the direction of Fluence Energy i.e., Fluence Energy and Kenon Holdings go up and down completely randomly.
Pair Corralation between Fluence Energy and Kenon Holdings
Given the investment horizon of 90 days Fluence Energy is expected to generate 2.54 times more return on investment than Kenon Holdings. However, Fluence Energy is 2.54 times more volatile than Kenon Holdings. It trades about 0.06 of its potential returns per unit of risk. Kenon Holdings is currently generating about 0.09 per unit of risk. If you would invest 2,162 in Fluence Energy on August 26, 2024 and sell it today you would earn a total of 140.00 from holding Fluence Energy or generate 6.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fluence Energy vs. Kenon Holdings
Performance |
| Timeline |
| Fluence Energy |
| Kenon Holdings |
Fluence Energy and Kenon Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fluence Energy and Kenon Holdings
The main advantage of trading using opposite Fluence Energy and Kenon Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fluence Energy position performs unexpectedly, Kenon Holdings 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 Kenon Holdings will offset losses from the drop in Kenon Holdings' long position.| Fluence Energy vs. Altus Power | Fluence Energy vs. Ormat Technologies | Fluence Energy vs. Enlight Renewable Energy | Fluence Energy vs. Advent Technologies Holdings |
| Kenon Holdings vs. Vistra Energy Corp | Kenon Holdings vs. Pampa Energia SA | Kenon Holdings vs. NRG Energy | Kenon Holdings vs. TransAlta Corp |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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