Correlation Between Charwood Energy and Hydrogene
Can any of the company-specific risk be diversified away by investing in both Charwood Energy and Hydrogene 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 Charwood Energy and Hydrogene into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Charwood Energy SA and Hydrogene De France, you can compare the effects of market volatilities on Charwood Energy and Hydrogene 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 Charwood Energy with a short position of Hydrogene. Check out your portfolio center. Please also check ongoing floating volatility patterns of Charwood Energy and Hydrogene.
Diversification Opportunities for Charwood Energy and Hydrogene
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Charwood and Hydrogene is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Charwood Energy SA and Hydrogene De France in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hydrogene De France and Charwood 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 Charwood Energy SA are associated (or correlated) with Hydrogene. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hydrogene De France has no effect on the direction of Charwood Energy i.e., Charwood Energy and Hydrogene go up and down completely randomly.
Pair Corralation between Charwood Energy and Hydrogene
Assuming the 90 days trading horizon Charwood Energy SA is expected to generate 0.61 times more return on investment than Hydrogene. However, Charwood Energy SA is 1.64 times less risky than Hydrogene. It trades about -0.07 of its potential returns per unit of risk. Hydrogene De France is currently generating about -0.44 per unit of risk. If you would invest 296.00 in Charwood Energy SA on September 1, 2024 and sell it today you would lose (12.00) from holding Charwood Energy SA or give up 4.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Charwood Energy SA vs. Hydrogene De France
Performance |
| Timeline |
| Charwood Energy SA |
| Hydrogene De France |
Charwood Energy and Hydrogene Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Charwood Energy and Hydrogene
The main advantage of trading using opposite Charwood Energy and Hydrogene positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Charwood Energy position performs unexpectedly, Hydrogene 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 Hydrogene will offset losses from the drop in Hydrogene's long position.| Charwood Energy vs. Hydrogene De France | Charwood Energy vs. Hydrogen Refueling Solutions | Charwood Energy vs. Neoen SA | Charwood Energy vs. Manitou BF SA |
| Hydrogene vs. Hydrogen Refueling Solutions | Hydrogene vs. Lhyfe SA | Hydrogene vs. Neoen SA | Hydrogene vs. Voltalia SA |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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