Correlation Between Fusion Fuel and Vision Energy

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

Diversification Opportunities for Fusion Fuel and Vision Energy

-0.22

Correlation Coefficient

Fusion Fuel  Vision Energy

Very good diversification

The 3 months correlation between Fusion and Vision is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Fusion Fuel Green and Vision Energy Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vision Energy Corp 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 Vision Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vision Energy Corp has no effect on the direction of Fusion Fuel i.e., Fusion Fuel and Vision Energy go up and down completely randomly.

Pair Corralation between Fusion Fuel and Vision Energy

Given the investment horizon of 90 days Fusion Fuel Green is expected to under-perform the Vision Energy. But the stock apears to be less risky and, when comparing its historical volatility, Fusion Fuel Green is 12.95 times less risky than Vision Energy. The stock trades about -0.14 of its potential returns per unit of risk. The Vision Energy Corp is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  0.01  in Vision Energy Corp on December 28, 2024 and sell it today you would earn a total of  0.07  from holding Vision Energy Corp or generate 700.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.77%
Values	Daily Returns

Fusion Fuel Green  vs.  Vision Energy Corp

Fusion Fuel Green

Risk-Adjusted Performance

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 April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Vision Energy Corp

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Vision Energy Corp are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite nearly abnormal basic indicators, Vision Energy reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Fusion Fuel and Vision Energy

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

The idea behind Fusion Fuel Green and Vision Energy Corp 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 Global Correlations module to find global opportunities by holding instruments from different markets.