Correlation Between Enlight Renewable and Fusion Fuel
Can any of the company-specific risk be diversified away by investing in both Enlight Renewable 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 Enlight Renewable and Fusion Fuel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enlight Renewable Energy and Fusion Fuel Green, you can compare the effects of market volatilities on Enlight Renewable 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 Enlight Renewable with a short position of Fusion Fuel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enlight Renewable and Fusion Fuel.
Diversification Opportunities for Enlight Renewable and Fusion Fuel
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Enlight and Fusion is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Enlight Renewable Energy 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 Enlight Renewable 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 Enlight Renewable Energy 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 Enlight Renewable i.e., Enlight Renewable and Fusion Fuel go up and down completely randomly.
Pair Corralation between Enlight Renewable and Fusion Fuel
Given the investment horizon of 90 days Enlight Renewable Energy is expected to generate 0.4 times more return on investment than Fusion Fuel. However, Enlight Renewable Energy is 2.48 times less risky than Fusion Fuel. It trades about 0.03 of its potential returns per unit of risk. Fusion Fuel Green is currently generating about -0.05 per unit of risk. If you would invest 1,525 in Enlight Renewable Energy on July 29, 2024 and sell it today you would earn a total of 54.00 from holding Enlight Renewable Energy or generate 3.54% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Enlight Renewable Energy vs. Fusion Fuel Green
Performance |
Timeline |
Enlight Renewable Energy |
Fusion Fuel Green |
Enlight Renewable and Fusion Fuel Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Enlight Renewable and Fusion Fuel
The main advantage of trading using opposite Enlight Renewable and Fusion Fuel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enlight Renewable 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.Enlight Renewable vs. Atlantica Sustainable Infrastructure | Enlight Renewable vs. Verde Clean Fuels | Enlight Renewable vs. ReNew Energy Global | Enlight Renewable vs. Eco Wave Power |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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