Correlation Between Fortum Oyj and Fusion Fuel
Can any of the company-specific risk be diversified away by investing in both Fortum Oyj and Fusion Fuel 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 Fusion Fuel 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 Fusion Fuel Green, you can compare the effects of market volatilities on Fortum Oyj and Fusion Fuel 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 Fusion Fuel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fortum Oyj and Fusion Fuel.
Diversification Opportunities for Fortum Oyj and Fusion Fuel
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Fortum and Fusion is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Fortum Oyj ADR and Fusion Fuel Green in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fusion Fuel Green 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 Fusion Fuel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fusion Fuel Green has no effect on the direction of Fortum Oyj i.e., Fortum Oyj and Fusion Fuel go up and down completely randomly.
Pair Corralation between Fortum Oyj and Fusion Fuel
Assuming the 90 days horizon Fortum Oyj is expected to generate 13.69 times less return on investment than Fusion Fuel. But when comparing it to its historical volatility, Fortum Oyj ADR is 10.32 times less risky than Fusion Fuel. It trades about 0.04 of its potential returns per unit of risk. Fusion Fuel Green is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 13.00 in Fusion Fuel Green on October 24, 2024 and sell it today you would lose (10.45) from holding Fusion Fuel Green or give up 80.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fortum Oyj ADR vs. Fusion Fuel Green
Performance |
| Timeline |
| Fortum Oyj ADR |
| Fusion Fuel Green |
Fortum Oyj and Fusion Fuel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fortum Oyj and Fusion Fuel
The main advantage of trading using opposite Fortum Oyj and Fusion Fuel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fortum Oyj position performs unexpectedly, Fusion Fuel 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 Fusion Fuel will offset losses from the drop in Fusion Fuel'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 |
| Fusion Fuel vs. Fusion Fuel Green | Fusion Fuel vs. Advent Technologies Holdings | Fusion Fuel vs. Eos Energy Enterprises | Fusion Fuel vs. CuriosityStream |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
Other Complementary Tools
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |