Correlation Between Fluence Energy and Alternus Energy

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

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

Diversification Opportunities for Fluence Energy and Alternus Energy

0.0

Correlation Coefficient

Fluence Energy  Alternus Energy

Pay attention - limited upside

The 3 months correlation between Fluence and Alternus is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Fluence Energy and Alternus Energy Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alternus Energy Group and Fluence 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 Fluence Energy are associated (or correlated) with Alternus Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alternus Energy Group has no effect on the direction of Fluence Energy i.e., Fluence Energy and Alternus Energy go up and down completely randomly.

Pair Corralation between Fluence Energy and Alternus Energy

Given the investment horizon of 90 days Fluence Energy is expected to generate 1.35 times more return on investment than Alternus Energy. However, Fluence Energy is 1.35 times more volatile than Alternus Energy Group. It trades about 0.0 of its potential returns per unit of risk. Alternus Energy Group is currently generating about -0.02 per unit of risk. If you would invest  2,199  in Fluence Energy on October 2, 2024 and sell it today you would lose (557.00) from holding Fluence Energy or give up 25.33% of portfolio value over 90 days.

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

Fluence Energy  vs.  Alternus Energy Group

Fluence Energy

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fluence Energy has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Alternus Energy Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Alternus Energy Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Alternus Energy is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Fluence Energy and Alternus Energy

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

The idea behind Fluence Energy and Alternus Energy Group 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.