Correlation Between Fusion Fuel and Brookfield Renewable
Can any of the company-specific risk be diversified away by investing in both Fusion Fuel and Brookfield Renewable 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 Brookfield Renewable 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 Brookfield Renewable Corp, you can compare the effects of market volatilities on Fusion Fuel and Brookfield Renewable 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 Brookfield Renewable. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fusion Fuel and Brookfield Renewable.
Diversification Opportunities for Fusion Fuel and Brookfield Renewable
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Fusion and Brookfield is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Fusion Fuel Green and Brookfield Renewable Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brookfield Renewable Corp 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 Brookfield Renewable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brookfield Renewable Corp has no effect on the direction of Fusion Fuel i.e., Fusion Fuel and Brookfield Renewable go up and down completely randomly.
Pair Corralation between Fusion Fuel and Brookfield Renewable
Assuming the 90 days horizon Fusion Fuel Green is expected to generate 10.78 times more return on investment than Brookfield Renewable. However, Fusion Fuel is 10.78 times more volatile than Brookfield Renewable Corp. It trades about 0.09 of its potential returns per unit of risk. Brookfield Renewable Corp is currently generating about -0.17 per unit of risk. If you would invest 3.30 in Fusion Fuel Green on October 26, 2024 and sell it today you would lose (0.99) from holding Fusion Fuel Green or give up 30.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fusion Fuel Green vs. Brookfield Renewable Corp
Performance |
| Timeline |
| Fusion Fuel Green |
| Brookfield Renewable Corp |
Fusion Fuel and Brookfield Renewable Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fusion Fuel and Brookfield Renewable
The main advantage of trading using opposite Fusion Fuel and Brookfield Renewable positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fusion Fuel position performs unexpectedly, Brookfield Renewable 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 Brookfield Renewable will offset losses from the drop in Brookfield Renewable's long position.| Fusion Fuel vs. Fusion Fuel Green | Fusion Fuel vs. Advent Technologies Holdings | Fusion Fuel vs. Eos Energy Enterprises | Fusion Fuel vs. CuriosityStream |
| Brookfield Renewable vs. Nextera Energy Partners | Brookfield Renewable vs. Algonquin Power Utilities | Brookfield Renewable vs. Clearway Energy Class | Brookfield Renewable vs. Clearway Energy |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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