Correlation Between Fluence Energy and Energy Vault

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

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

Diversification Opportunities for Fluence Energy and Energy Vault

0.89

Correlation Coefficient

Fluence Energy  Energy Vault

Very poor diversification

The 3 months correlation between Fluence and Energy is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Fluence Energy and Energy Vault Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Energy Vault Holdings 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 Energy Vault. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Energy Vault Holdings has no effect on the direction of Fluence Energy i.e., Fluence Energy and Energy Vault go up and down completely randomly.

Pair Corralation between Fluence Energy and Energy Vault

Given the investment horizon of 90 days Fluence Energy is expected to generate 1.13 times more return on investment than Energy Vault. However, Fluence Energy is 1.13 times more volatile than Energy Vault Holdings. It trades about -0.22 of its potential returns per unit of risk. Energy Vault Holdings is currently generating about -0.29 per unit of risk. If you would invest  1,642  in Fluence Energy on December 29, 2024 and sell it today you would lose (1,139) from holding Fluence Energy or give up 69.37% of portfolio value over 90 days.

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

Fluence Energy  vs.  Energy Vault Holdings

Fluence Energy

Risk-Adjusted Performance

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 April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Energy Vault Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Energy Vault Holdings 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 technical and fundamental indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Fluence Energy and Energy Vault

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

The idea behind Fluence Energy and Energy Vault 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.