Correlation Between Heliogen and Fortum Oyj

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

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

Diversification Opportunities for Heliogen and Fortum Oyj

0.27

Correlation Coefficient

Heliogen  Fortum Oyj

Modest diversification

The 3 months correlation between Heliogen and Fortum is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Heliogen and Fortum Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fortum Oyj and Heliogen 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 Heliogen 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 Heliogen i.e., Heliogen and Fortum Oyj go up and down completely randomly.

Pair Corralation between Heliogen and Fortum Oyj

If you would invest  28.00  in Heliogen on September 5, 2024 and sell it today you would earn a total of  0.00  from holding Heliogen or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	1.59%
Values	Daily Returns

Heliogen  vs.  Fortum Oyj

Heliogen

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Heliogen has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, Heliogen is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Fortum Oyj

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fortum Oyj has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Heliogen and Fortum Oyj

The main advantage of trading using opposite Heliogen and Fortum Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Heliogen 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 Heliogen 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.

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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..