Correlation Between Fusion Fuel and Global X
Can any of the company-specific risk be diversified away by investing in both Fusion Fuel and Global X 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 Global X 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 Global X Hydrogen, you can compare the effects of market volatilities on Fusion Fuel and Global X 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 Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fusion Fuel and Global X.
Diversification Opportunities for Fusion Fuel and Global X
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Fusion and Global is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Fusion Fuel Green and Global X Hydrogen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Hydrogen 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 Global X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global X Hydrogen has no effect on the direction of Fusion Fuel i.e., Fusion Fuel and Global X go up and down completely randomly.
Pair Corralation between Fusion Fuel and Global X
Given the investment horizon of 90 days Fusion Fuel Green is expected to under-perform the Global X. In addition to that, Fusion Fuel is 1.59 times more volatile than Global X Hydrogen. It trades about -0.35 of its total potential returns per unit of risk. Global X Hydrogen is currently generating about -0.14 per unit of volatility. If you would invest 2,181 in Global X Hydrogen on December 9, 2024 and sell it today you would lose (168.00) from holding Global X Hydrogen or give up 7.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fusion Fuel Green vs. Global X Hydrogen
Performance |
| Timeline |
| Fusion Fuel Green |
| Global X Hydrogen |
Fusion Fuel and Global X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fusion Fuel and Global X
The main advantage of trading using opposite Fusion Fuel and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fusion Fuel position performs unexpectedly, Global X 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 Global X will offset losses from the drop in Global X's long position.| Fusion Fuel vs. Advent Technologies Holdings | ||
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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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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