Correlation Between Fluence Energy and Ormat Technologies
Can any of the company-specific risk be diversified away by investing in both Fluence Energy and Ormat Technologies 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 Ormat Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fluence Energy and Ormat Technologies, you can compare the effects of market volatilities on Fluence Energy and Ormat Technologies 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 Ormat Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fluence Energy and Ormat Technologies.
Diversification Opportunities for Fluence Energy and Ormat Technologies
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Fluence and Ormat is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Fluence Energy and Ormat Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ormat Technologies 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 Ormat Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ormat Technologies has no effect on the direction of Fluence Energy i.e., Fluence Energy and Ormat Technologies go up and down completely randomly.
Pair Corralation between Fluence Energy and Ormat Technologies
Given the investment horizon of 90 days Fluence Energy is expected to generate 3.32 times more return on investment than Ormat Technologies. However, Fluence Energy is 3.32 times more volatile than Ormat Technologies. It trades about 0.14 of its potential returns per unit of risk. Ormat Technologies is currently generating about 0.03 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 Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fluence Energy vs. Ormat Technologies
Performance |
| Timeline |
| Fluence Energy |
| Ormat Technologies |
Fluence Energy and Ormat Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fluence Energy and Ormat Technologies
The main advantage of trading using opposite Fluence Energy and Ormat Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fluence Energy position performs unexpectedly, Ormat Technologies 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 Ormat Technologies will offset losses from the drop in Ormat Technologies' long position.| Fluence Energy vs. Altus Power | Fluence Energy vs. Ormat Technologies | Fluence Energy vs. Enlight Renewable Energy | Fluence Energy vs. Advent Technologies Holdings |
| Ormat Technologies vs. Altus Power | Ormat Technologies vs. Enlight Renewable Energy | Ormat Technologies vs. Fluence Energy | Ormat Technologies 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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