Correlation Between Fusion Fuel and Ceres Power

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

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

Diversification Opportunities for Fusion Fuel and Ceres Power

-0.73

Correlation Coefficient

Fusion Fuel  Ceres Power

Pay attention - limited upside

The 3 months correlation between Fusion and Ceres is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Fusion Fuel Green and Ceres Power Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ceres Power Holdings and Fusion Fuel 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 Fusion Fuel Green are associated (or correlated) with Ceres Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ceres Power Holdings has no effect on the direction of Fusion Fuel i.e., Fusion Fuel and Ceres Power go up and down completely randomly.

Pair Corralation between Fusion Fuel and Ceres Power

Given the investment horizon of 90 days Fusion Fuel Green is expected to under-perform the Ceres Power. In addition to that, Fusion Fuel is 1.36 times more volatile than Ceres Power Holdings. It trades about -0.02 of its total potential returns per unit of risk. Ceres Power Holdings is currently generating about 0.16 per unit of volatility. If you would invest  77.00  in Ceres Power Holdings on May 5, 2025 and sell it today you would earn a total of  83.00  from holding Ceres Power Holdings or generate 107.79% return on investment over 90 days.

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

Fusion Fuel Green  vs.  Ceres Power Holdings

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.

Ceres Power Holdings

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ceres Power Holdings are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly abnormal technical indicators, Ceres Power reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Fusion Fuel and Ceres Power

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

The idea behind Fusion Fuel Green and Ceres Power Holdings 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.