Correlation Between Brenmiller Energy and Fortum Oyj

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

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

Diversification Opportunities for Brenmiller Energy and Fortum Oyj

-0.56

Correlation Coefficient

Brenmiller Energy  Fortum Oyj

Excellent diversification

The 3 months correlation between Brenmiller and Fortum is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Brenmiller Energy Ltd and Fortum Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fortum Oyj and Brenmiller Energy 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 Brenmiller Energy Ltd are associated (or correlated) with Fortum Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fortum Oyj has no effect on the direction of Brenmiller Energy i.e., Brenmiller Energy and Fortum Oyj go up and down completely randomly.

Pair Corralation between Brenmiller Energy and Fortum Oyj

Given the investment horizon of 90 days Brenmiller Energy Ltd is expected to generate 10.49 times more return on investment than Fortum Oyj. However, Brenmiller Energy is 10.49 times more volatile than Fortum Oyj. It trades about 0.04 of its potential returns per unit of risk. Fortum Oyj is currently generating about 0.2 per unit of risk. If you would invest  157.00  in Brenmiller Energy Ltd on December 2, 2024 and sell it today you would lose (13.00) from holding Brenmiller Energy Ltd or give up 8.28% of portfolio value over 90 days.

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

Brenmiller Energy Ltd  vs.  Fortum Oyj

Brenmiller Energy

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Brenmiller Energy Ltd are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Brenmiller Energy reported solid returns over the last few months and may actually be approaching a breakup point.

Fortum Oyj

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Fortum Oyj are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak fundamental indicators, Fortum Oyj may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Brenmiller Energy and Fortum Oyj

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

The idea behind Brenmiller Energy Ltd and Fortum Oyj 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.