Correlation Between Fusion Fuel and American Security
Can any of the company-specific risk be diversified away by investing in both Fusion Fuel and American Security 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 Fusion Fuel and American Security into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fusion Fuel Green and American Security Resources, you can compare the effects of market volatilities on Fusion Fuel and American Security 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 Fusion Fuel with a short position of American Security. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fusion Fuel and American Security.
Diversification Opportunities for Fusion Fuel and American Security
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Fusion and American is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Fusion Fuel Green and American Security Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Security and Fusion Fuel 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 Fusion Fuel Green are associated (or correlated) with American Security. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Security has no effect on the direction of Fusion Fuel i.e., Fusion Fuel and American Security go up and down completely randomly.
Pair Corralation between Fusion Fuel and American Security
Given the investment horizon of 90 days Fusion Fuel Green is expected to under-perform the American Security. But the stock apears to be less risky and, when comparing its historical volatility, Fusion Fuel Green is 7.3 times less risky than American Security. The stock trades about -0.03 of its potential returns per unit of risk. The American Security Resources is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 0.03 in American Security Resources on September 2, 2024 and sell it today you would lose (0.02) from holding American Security Resources or give up 66.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Fusion Fuel Green vs. American Security Resources
Performance |
| Timeline |
| Fusion Fuel Green |
| American Security |
Fusion Fuel and American Security Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fusion Fuel and American Security
The main advantage of trading using opposite Fusion Fuel and American Security positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fusion Fuel position performs unexpectedly, American Security 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 American Security will offset losses from the drop in American Security's long position.| Fusion Fuel vs. Advent Technologies Holdings | Fusion Fuel vs. Fluence Energy | Fusion Fuel vs. Enlight Renewable Energy | Fusion Fuel vs. Renew Energy Global |
| American Security vs. Astra Energy | American Security vs. Alternus Energy Group | American Security vs. Carnegie Clean Energy | American Security vs. Altius Renewable Royalties |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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