Correlation Between Ellomay Capital and Fluence Energy

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

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

Diversification Opportunities for Ellomay Capital and Fluence Energy

-0.12

Correlation Coefficient

Ellomay Capital  Fluence Energy

Good diversification

The 3 months correlation between Ellomay and Fluence is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Ellomay Capital and Fluence Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fluence Energy and Ellomay Capital 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 Ellomay Capital 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 Ellomay Capital i.e., Ellomay Capital and Fluence Energy go up and down completely randomly.

Pair Corralation between Ellomay Capital and Fluence Energy

Given the investment horizon of 90 days Ellomay Capital is expected to generate 0.66 times more return on investment than Fluence Energy. However, Ellomay Capital is 1.51 times less risky than Fluence Energy. It trades about 0.15 of its potential returns per unit of risk. Fluence Energy is currently generating about 0.04 per unit of risk. If you would invest  1,260  in Ellomay Capital on August 31, 2024 and sell it today you would earn a total of  340.00  from holding Ellomay Capital or generate 26.98% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	92.06%
Values	Daily Returns

Ellomay Capital  vs.  Fluence Energy

Ellomay Capital

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ellomay Capital are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain essential indicators, Ellomay Capital displayed solid returns over the last few months and may actually be approaching a breakup point.

Fluence Energy

Risk-Adjusted Performance

3 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Fluence Energy are ranked lower than 3 (%) 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 Ellomay Capital and Fluence Energy

The main advantage of trading using opposite Ellomay Capital and Fluence Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ellomay Capital 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 Ellomay Capital 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.

Check out your portfolio center.

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.