Correlation Between Fusion Fuel and Renew Energy
Can any of the company-specific risk be diversified away by investing in both Fusion Fuel and Renew 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 Fusion Fuel and Renew Energy 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 Renew Energy Global, you can compare the effects of market volatilities on Fusion Fuel and Renew 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 Fusion Fuel with a short position of Renew Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fusion Fuel and Renew Energy.
Diversification Opportunities for Fusion Fuel and Renew Energy
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Fusion and Renew is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Fusion Fuel Green and Renew Energy Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Renew Energy Global 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 Renew Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Renew Energy Global has no effect on the direction of Fusion Fuel i.e., Fusion Fuel and Renew Energy go up and down completely randomly.
Pair Corralation between Fusion Fuel and Renew Energy
Assuming the 90 days horizon Fusion Fuel Green is expected to generate 8.45 times more return on investment than Renew Energy. However, Fusion Fuel is 8.45 times more volatile than Renew Energy Global. It trades about 0.09 of its potential returns per unit of risk. Renew Energy Global is currently generating about 0.08 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 Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fusion Fuel Green vs. Renew Energy Global
Performance |
| Timeline |
| Fusion Fuel Green |
| Renew Energy Global |
Fusion Fuel and Renew Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fusion Fuel and Renew Energy
The main advantage of trading using opposite Fusion Fuel and Renew Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fusion Fuel position performs unexpectedly, Renew 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 Renew Energy will offset losses from the drop in Renew Energy'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 |
| Renew Energy vs. Energy Vault Holdings | Renew Energy vs. Fluence Energy | Renew Energy vs. Altus Power | Renew Energy vs. Clearway Energy Class |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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