Correlation Between Capstone Green and Next Hydrogen
Can any of the company-specific risk be diversified away by investing in both Capstone Green and Next Hydrogen 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 Capstone Green and Next Hydrogen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capstone Green Energy and Next Hydrogen Solutions, you can compare the effects of market volatilities on Capstone Green and Next Hydrogen 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 Capstone Green with a short position of Next Hydrogen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capstone Green and Next Hydrogen.
Diversification Opportunities for Capstone Green and Next Hydrogen
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Capstone and Next is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Capstone Green Energy and Next Hydrogen Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Next Hydrogen Solutions and Capstone Green 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 Capstone Green Energy are associated (or correlated) with Next Hydrogen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Next Hydrogen Solutions has no effect on the direction of Capstone Green i.e., Capstone Green and Next Hydrogen go up and down completely randomly.
Pair Corralation between Capstone Green and Next Hydrogen
If you would invest 119.00 in Capstone Green Energy on September 2, 2024 and sell it today you would earn a total of 0.00 from holding Capstone Green Energy or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Capstone Green Energy vs. Next Hydrogen Solutions
Performance |
| Timeline |
| Capstone Green Energy |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Next Hydrogen Solutions |
Capstone Green and Next Hydrogen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capstone Green and Next Hydrogen
The main advantage of trading using opposite Capstone Green and Next Hydrogen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capstone Green position performs unexpectedly, Next Hydrogen 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 Next Hydrogen will offset losses from the drop in Next Hydrogen's long position.| Capstone Green vs. Nordson | Capstone Green vs. CVD Equipment | Capstone Green vs. Barnes Group | Capstone Green vs. Ametek Inc |
| Next Hydrogen vs. Weir Group PLC | Next Hydrogen vs. Greenshift Corp | Next Hydrogen vs. Quality Industrial Corp | Next Hydrogen vs. ITM Power Plc |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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