Correlation Between Cloudflare and Fluence Energy
Can any of the company-specific risk be diversified away by investing in both Cloudflare and Fluence 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 Cloudflare and Fluence Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cloudflare and Fluence Energy, you can compare the effects of market volatilities on Cloudflare and Fluence 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 Cloudflare with a short position of Fluence Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cloudflare and Fluence Energy.
Diversification Opportunities for Cloudflare and Fluence Energy
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Cloudflare and Fluence is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Cloudflare and Fluence Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fluence Energy and Cloudflare 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 Cloudflare are associated (or correlated) with Fluence Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fluence Energy has no effect on the direction of Cloudflare i.e., Cloudflare and Fluence Energy go up and down completely randomly.
Pair Corralation between Cloudflare and Fluence Energy
Considering the 90-day investment horizon Cloudflare is expected to generate 0.47 times more return on investment than Fluence Energy. However, Cloudflare is 2.11 times less risky than Fluence Energy. It trades about 0.14 of its potential returns per unit of risk. Fluence Energy is currently generating about -0.27 per unit of risk. If you would invest 10,373 in Cloudflare on September 26, 2024 and sell it today you would earn a total of 785.00 from holding Cloudflare or generate 7.57% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Cloudflare vs. Fluence Energy
Performance |
Timeline |
Cloudflare |
Fluence Energy |
Cloudflare and Fluence Energy Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Cloudflare and Fluence Energy
The main advantage of trading using opposite Cloudflare and Fluence Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cloudflare position performs unexpectedly, Fluence 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 Fluence Energy will offset losses from the drop in Fluence Energy's long position.Cloudflare vs. Palo Alto Networks | Cloudflare vs. Zscaler | Cloudflare vs. Okta Inc | Cloudflare vs. Adobe Systems Incorporated |
Fluence Energy vs. Palo Alto Networks | Fluence Energy vs. Crowdstrike Holdings | Fluence Energy vs. Cloudflare | Fluence Energy vs. Palantir Technologies Class |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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