Correlation Between Azure Power and Fusion Fuel
Can any of the company-specific risk be diversified away by investing in both Azure Power 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 Azure Power and Fusion Fuel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Azure Power Global and Fusion Fuel Green, you can compare the effects of market volatilities on Azure Power 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 Azure Power with a short position of Fusion Fuel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Azure Power and Fusion Fuel.
Diversification Opportunities for Azure Power and Fusion Fuel
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Azure and Fusion is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Azure Power Global 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 Azure Power 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 Azure Power Global 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 Azure Power i.e., Azure Power and Fusion Fuel go up and down completely randomly.
Pair Corralation between Azure Power and Fusion Fuel
If you would invest 53.00 in Fusion Fuel Green on July 29, 2024 and sell it today you would earn a total of 6.00 from holding Fusion Fuel Green or generate 11.32% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 4.55% |
Values | Daily Returns |
Azure Power Global vs. Fusion Fuel Green
Performance |
Timeline |
Azure Power Global |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Fusion Fuel Green |
Azure Power and Fusion Fuel Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Azure Power and Fusion Fuel
The main advantage of trading using opposite Azure Power and Fusion Fuel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Azure Power 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.Azure Power vs. Altus Power | Azure Power vs. Ormat Technologies | Azure Power vs. Enlight Renewable Energy | Azure Power vs. Fluence Energy |
Fusion Fuel vs. Verde Clean Fuels | Fusion Fuel vs. Smart Powerr Corp | Fusion Fuel vs. Ormat Technologies | Fusion Fuel vs. Tokyo Electric Power |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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