Correlation Between Nel ASA and Ballard Power
Can any of the company-specific risk be diversified away by investing in both Nel ASA and Ballard Power 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 Nel ASA and Ballard Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nel ASA and Ballard Power Systems, you can compare the effects of market volatilities on Nel ASA and Ballard Power 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 Nel ASA with a short position of Ballard Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nel ASA and Ballard Power.
Diversification Opportunities for Nel ASA and Ballard Power
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Nel and Ballard is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Nel ASA and Ballard Power Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ballard Power Systems and Nel ASA 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 Nel ASA are associated (or correlated) with Ballard Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ballard Power Systems has no effect on the direction of Nel ASA i.e., Nel ASA and Ballard Power go up and down completely randomly.
Pair Corralation between Nel ASA and Ballard Power
Assuming the 90 days horizon Nel ASA is expected to under-perform the Ballard Power. But the stock apears to be less risky and, when comparing its historical volatility, Nel ASA is 1.19 times less risky than Ballard Power. The stock trades about -0.35 of its potential returns per unit of risk. The Ballard Power Systems is currently generating about -0.11 of returns per unit of risk over similar time horizon. If you would invest 158.00 in Ballard Power Systems on August 29, 2024 and sell it today you would lose (24.00) from holding Ballard Power Systems or give up 15.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nel ASA vs. Ballard Power Systems
Performance |
| Timeline |
| Nel ASA |
| Ballard Power Systems |
Nel ASA and Ballard Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nel ASA and Ballard Power
The main advantage of trading using opposite Nel ASA and Ballard Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nel ASA position performs unexpectedly, Ballard Power 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 Ballard Power will offset losses from the drop in Ballard Power's long position.| Nel ASA vs. Superior Plus Corp | Nel ASA vs. NMI Holdings | Nel ASA vs. Origin Agritech | Nel ASA vs. SIVERS SEMICONDUCTORS AB |
| Ballard Power vs. Superior Plus Corp | Ballard Power vs. NMI Holdings | Ballard Power vs. Origin Agritech | Ballard Power vs. SIVERS SEMICONDUCTORS AB |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
Other Complementary Tools
| CEOs Directory Screen CEOs from public companies around the world | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. |