Correlation Between Fusion Fuel and Amplify Lithium

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

By analyzing existing cross correlation between Fusion Fuel Green and Amplify Lithium Battery, you can compare the effects of market volatilities on Fusion Fuel and Amplify Lithium 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 Fusion Fuel with a short position of Amplify Lithium. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fusion Fuel and Amplify Lithium.

Diversification Opportunities for Fusion Fuel and Amplify Lithium

-0.26

Correlation Coefficient

Fusion Fuel  Amplify Lithium

Very good diversification

The 3 months correlation between Fusion and Amplify is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Fusion Fuel Green and Amplify Lithium Battery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amplify Lithium Battery and Fusion Fuel 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 Fusion Fuel Green are associated (or correlated) with Amplify Lithium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amplify Lithium Battery has no effect on the direction of Fusion Fuel i.e., Fusion Fuel and Amplify Lithium go up and down completely randomly.

Pair Corralation between Fusion Fuel and Amplify Lithium

Given the investment horizon of 90 days Fusion Fuel Green is expected to under-perform the Amplify Lithium. In addition to that, Fusion Fuel is 5.19 times more volatile than Amplify Lithium Battery. It trades about -0.05 of its total potential returns per unit of risk. Amplify Lithium Battery is currently generating about 0.12 per unit of volatility. If you would invest  822.00  in Amplify Lithium Battery on September 3, 2024 and sell it today you would earn a total of  122.00  from holding Amplify Lithium Battery or generate 14.84% return on investment over 90 days.

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

Fusion Fuel Green  vs.  Amplify Lithium Battery

Fusion Fuel Green

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fusion Fuel Green has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Amplify Lithium Battery

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Amplify Lithium Battery are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Amplify Lithium unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Fusion Fuel and Amplify Lithium

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

The idea behind Fusion Fuel Green and Amplify Lithium Battery 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.