Correlation Between Fluence Energy and Vision Energy

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

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

Diversification Opportunities for Fluence Energy and Vision Energy

0.14

Correlation Coefficient

Fluence Energy  Vision Energy

Average diversification

The 3 months correlation between Fluence and Vision is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Fluence Energy 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 Fluence Energy 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 Fluence Energy 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 Fluence Energy i.e., Fluence Energy and Vision Energy go up and down completely randomly.

Pair Corralation between Fluence Energy and Vision Energy

Given the investment horizon of 90 days Fluence Energy is expected to under-perform the Vision Energy. But the stock apears to be less risky and, when comparing its historical volatility, Fluence Energy is 40.33 times less risky than Vision Energy. The stock trades about -0.08 of its potential returns per unit of risk. The Vision Energy Corp is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest  0.07  in Vision Energy Corp on September 26, 2024 and sell it today you would lose (0.06) from holding Vision Energy Corp or give up 85.71% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Fluence Energy  vs.  Vision Energy Corp

Fluence Energy

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fluence Energy has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Vision Energy Corp

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Vision Energy Corp are ranked lower than 21 (%) 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 Fluence Energy and Vision Energy

The main advantage of trading using opposite Fluence Energy and Vision Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fluence Energy 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 Fluence Energy 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.