Correlation Between Fluence Energy and Reservoir Media
Can any of the company-specific risk be diversified away by investing in both Fluence Energy and Reservoir Media 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 Reservoir Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fluence Energy and Reservoir Media, you can compare the effects of market volatilities on Fluence Energy and Reservoir Media 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 Reservoir Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fluence Energy and Reservoir Media.
Diversification Opportunities for Fluence Energy and Reservoir Media
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Fluence and Reservoir is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Fluence Energy and Reservoir Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Reservoir Media 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 Reservoir Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Reservoir Media has no effect on the direction of Fluence Energy i.e., Fluence Energy and Reservoir Media go up and down completely randomly.
Pair Corralation between Fluence Energy and Reservoir Media
Given the investment horizon of 90 days Fluence Energy is expected to generate 2.0 times less return on investment than Reservoir Media. In addition to that, Fluence Energy is 1.75 times more volatile than Reservoir Media. It trades about 0.06 of its total potential returns per unit of risk. Reservoir Media is currently generating about 0.19 per unit of volatility. If you would invest 781.00 in Reservoir Media on August 26, 2024 and sell it today you would earn a total of 162.00 from holding Reservoir Media or generate 20.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fluence Energy vs. Reservoir Media
Performance |
| Timeline |
| Fluence Energy |
| Reservoir Media |
Fluence Energy and Reservoir Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fluence Energy and Reservoir Media
The main advantage of trading using opposite Fluence Energy and Reservoir Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fluence Energy position performs unexpectedly, Reservoir Media 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 Reservoir Media will offset losses from the drop in Reservoir Media'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 |
| Reservoir Media vs. ADTRAN Inc | Reservoir Media vs. Belden Inc | Reservoir Media vs. ADC Therapeutics SA | Reservoir Media vs. Comtech Telecommunications 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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