Correlation Between ESS Tech and Fusion Fuel

Can any of the company-specific risk be diversified away by investing in both ESS Tech 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 ESS Tech and Fusion Fuel into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ESS Tech and Fusion Fuel Green, you can compare the effects of market volatilities on ESS Tech 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 ESS Tech with a short position of Fusion Fuel. Check out your portfolio center. Please also check ongoing floating volatility patterns of ESS Tech and Fusion Fuel.

Diversification Opportunities for ESS Tech and Fusion Fuel

0.11

Correlation Coefficient

ESS Tech  Fusion Fuel

Average diversification

The 3 months correlation between ESS and Fusion is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding ESS Tech 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 ESS Tech 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 ESS Tech 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 ESS Tech i.e., ESS Tech and Fusion Fuel go up and down completely randomly.

Pair Corralation between ESS Tech and Fusion Fuel

Considering the 90-day investment horizon ESS Tech is expected to under-perform the Fusion Fuel. But the stock apears to be less risky and, when comparing its historical volatility, ESS Tech is 1.08 times less risky than Fusion Fuel. The stock trades about -0.02 of its potential returns per unit of risk. The Fusion Fuel Green is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  3,920  in Fusion Fuel Green on May 3, 2025 and sell it today you would lose (3,379) from holding Fusion Fuel Green or give up 86.2% of portfolio value over 90 days.

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

ESS Tech  vs.  Fusion Fuel Green

ESS Tech

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in ESS Tech are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady basic indicators, ESS Tech demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Fusion Fuel Green

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fusion Fuel Green has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in September 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with ESS Tech and Fusion Fuel

The main advantage of trading using opposite ESS Tech and Fusion Fuel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ESS Tech 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.

The idea behind ESS Tech and Fusion Fuel Green 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 CEOs Directory module to screen CEOs from public companies around the world.