Correlation Between Enovix Corp and Fluence Energy

Can any of the company-specific risk be diversified away by investing in both Enovix Corp and Fluence 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 Enovix Corp and Fluence Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Enovix Corp and Fluence Energy, you can compare the effects of market volatilities on Enovix Corp and Fluence 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 Enovix Corp with a short position of Fluence Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enovix Corp and Fluence Energy.

Diversification Opportunities for Enovix Corp and Fluence Energy

0.95

Correlation Coefficient

Enovix Corp  Fluence Energy

Almost no diversification

The 3 months correlation between Enovix and Fluence is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Enovix Corp and Fluence Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fluence Energy and Enovix Corp 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 Enovix Corp are associated (or correlated) with Fluence Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fluence Energy has no effect on the direction of Enovix Corp i.e., Enovix Corp and Fluence Energy go up and down completely randomly.

Pair Corralation between Enovix Corp and Fluence Energy

Given the investment horizon of 90 days Enovix Corp is expected to generate 1.07 times less return on investment than Fluence Energy. In addition to that, Enovix Corp is 1.03 times more volatile than Fluence Energy. It trades about 0.19 of its total potential returns per unit of risk. Fluence Energy is currently generating about 0.21 per unit of volatility. If you would invest  451.00  in Fluence Energy on May 7, 2025 and sell it today you would earn a total of  397.00  from holding Fluence Energy or generate 88.03% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Enovix Corp  vs.  Fluence Energy

Enovix Corp

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Enovix Corp are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady basic indicators, Enovix Corp showed solid returns over the last few months and may actually be approaching a breakup point.

Fluence Energy

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Fluence Energy are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, Fluence Energy exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Enovix Corp and Fluence Energy

The main advantage of trading using opposite Enovix Corp and Fluence Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enovix Corp position performs unexpectedly, Fluence 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 Fluence Energy will offset losses from the drop in Fluence Energy's long position.

The idea behind Enovix Corp and Fluence Energy pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.