Correlation Between Heliogen and Fluence Energy

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

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

Diversification Opportunities for Heliogen and Fluence Energy

-0.6

Correlation Coefficient

Heliogen  Fluence Energy

Excellent diversification

The 3 months correlation between Heliogen and Fluence is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Heliogen and Fluence Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fluence Energy and Heliogen 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 Heliogen 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 Heliogen i.e., Heliogen and Fluence Energy go up and down completely randomly.

Pair Corralation between Heliogen and Fluence Energy

If you would invest  1,608  in Fluence Energy on July 29, 2024 and sell it today you would earn a total of  458.00  from holding Fluence Energy or generate 28.48% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	1.54%
Values	Daily Returns

Heliogen  vs.  Fluence Energy

Heliogen

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Heliogen has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, Heliogen is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Fluence Energy

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Fluence Energy are ranked lower than 8 (%) 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 Heliogen and Fluence Energy

The main advantage of trading using opposite Heliogen and Fluence Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Heliogen 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 Heliogen 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.