Correlation Between Fluence Energy and Altius Renewable

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

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

Diversification Opportunities for Fluence Energy and Altius Renewable

0.17

Correlation Coefficient

Fluence Energy  Altius Renewable

Average diversification

The 3 months correlation between Fluence and Altius is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Fluence Energy and Altius Renewable Royalties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altius Renewable Roy 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 Altius Renewable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altius Renewable Roy has no effect on the direction of Fluence Energy i.e., Fluence Energy and Altius Renewable go up and down completely randomly.

Pair Corralation between Fluence Energy and Altius Renewable

Given the investment horizon of 90 days Fluence Energy is expected to under-perform the Altius Renewable. In addition to that, Fluence Energy is 2.75 times more volatile than Altius Renewable Royalties. It trades about 0.0 of its total potential returns per unit of risk. Altius Renewable Royalties is currently generating about 0.1 per unit of volatility. If you would invest  586.00  in Altius Renewable Royalties on October 2, 2024 and sell it today you would earn a total of  264.00  from holding Altius Renewable Royalties or generate 45.05% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	93.95%
Values	Daily Returns

Fluence Energy  vs.  Altius Renewable Royalties

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.

Altius Renewable Roy

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Fluence Energy and Altius Renewable

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

The idea behind Fluence Energy and Altius Renewable Royalties 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..