Correlation Between Fusion Fuel and Brenmiller Energy

Can any of the company-specific risk be diversified away by investing in both Fusion Fuel and Brenmiller 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 Fusion Fuel and Brenmiller Energy 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 Brenmiller Energy Ltd, you can compare the effects of market volatilities on Fusion Fuel and Brenmiller 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 Fusion Fuel with a short position of Brenmiller Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fusion Fuel and Brenmiller Energy.

Diversification Opportunities for Fusion Fuel and Brenmiller Energy

0.33

Correlation Coefficient

Fusion Fuel  Brenmiller Energy

Weak diversification

The 3 months correlation between Fusion and Brenmiller is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Fusion Fuel Green and Brenmiller Energy Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brenmiller Energy 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 Brenmiller Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brenmiller Energy has no effect on the direction of Fusion Fuel i.e., Fusion Fuel and Brenmiller Energy go up and down completely randomly.

Pair Corralation between Fusion Fuel and Brenmiller Energy

Given the investment horizon of 90 days Fusion Fuel Green is expected to generate 0.92 times more return on investment than Brenmiller Energy. However, Fusion Fuel Green is 1.09 times less risky than Brenmiller Energy. It trades about 0.01 of its potential returns per unit of risk. Brenmiller Energy Ltd is currently generating about -0.01 per unit of risk. If you would invest  115.00  in Fusion Fuel Green on October 2, 2024 and sell it today you would lose (59.00) from holding Fusion Fuel Green or give up 51.3% of portfolio value over 90 days.

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

Fusion Fuel Green  vs.  Brenmiller Energy Ltd

Fusion Fuel Green

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Fusion Fuel Green are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Fusion Fuel displayed solid returns over the last few months and may actually be approaching a breakup point.

Brenmiller Energy

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Brenmiller Energy Ltd are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly abnormal basic indicators, Brenmiller Energy reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Fusion Fuel and Brenmiller Energy

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

The idea behind Fusion Fuel Green and Brenmiller Energy Ltd 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.