Correlation Between Fortum Oyj and Alternus Energy
Can any of the company-specific risk be diversified away by investing in both Fortum Oyj and Alternus Energy 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 Fortum Oyj and Alternus Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fortum Oyj ADR and Alternus Energy Group, you can compare the effects of market volatilities on Fortum Oyj and Alternus Energy 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 Fortum Oyj with a short position of Alternus Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fortum Oyj and Alternus Energy.
Diversification Opportunities for Fortum Oyj and Alternus Energy
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Fortum and Alternus is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Fortum Oyj ADR and Alternus Energy Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alternus Energy Group and Fortum Oyj 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 Fortum Oyj ADR are associated (or correlated) with Alternus Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alternus Energy Group has no effect on the direction of Fortum Oyj i.e., Fortum Oyj and Alternus Energy go up and down completely randomly.
Pair Corralation between Fortum Oyj and Alternus Energy
Assuming the 90 days horizon Fortum Oyj is expected to generate 51.29 times less return on investment than Alternus Energy. But when comparing it to its historical volatility, Fortum Oyj ADR is 22.54 times less risky than Alternus Energy. It trades about 0.02 of its potential returns per unit of risk. Alternus Energy Group is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 125.00 in Alternus Energy Group on October 24, 2024 and sell it today you would lose (73.00) from holding Alternus Energy Group or give up 58.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 97.37% |
| Values | Daily Returns |
Fortum Oyj ADR vs. Alternus Energy Group
Performance |
| Timeline |
| Fortum Oyj ADR |
| Alternus Energy Group |
Fortum Oyj and Alternus Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fortum Oyj and Alternus Energy
The main advantage of trading using opposite Fortum Oyj and Alternus Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fortum Oyj position performs unexpectedly, Alternus Energy 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 Alternus Energy will offset losses from the drop in Alternus Energy's long position.| Fortum Oyj vs. Constellation Energy Corp | Fortum Oyj vs. Astra Energy | Fortum Oyj vs. Powertap Hydrogen Capital | Fortum Oyj vs. Brenmiller Energy Ltd |
| Alternus Energy vs. Denison Mines Corp | Alternus Energy vs. Coty Inc | Alternus Energy vs. Inflection Point Acquisition | Alternus Energy vs. Lion One Metals |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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