Correlation Between European Residential and Next Hydrogen
Can any of the company-specific risk be diversified away by investing in both European Residential 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 European Residential and Next Hydrogen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between European Residential Real and Next Hydrogen Solutions, you can compare the effects of market volatilities on European Residential 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 European Residential with a short position of Next Hydrogen. Check out your portfolio center. Please also check ongoing floating volatility patterns of European Residential and Next Hydrogen.
Diversification Opportunities for European Residential and Next Hydrogen
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between European and Next is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding European Residential Real 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 European Residential 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 European Residential Real 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 European Residential i.e., European Residential and Next Hydrogen go up and down completely randomly.
Pair Corralation between European Residential and Next Hydrogen
Assuming the 90 days trading horizon European Residential Real is expected to generate 0.32 times more return on investment than Next Hydrogen. However, European Residential Real is 3.14 times less risky than Next Hydrogen. It trades about 0.13 of its potential returns per unit of risk. Next Hydrogen Solutions is currently generating about 0.0 per unit of risk. If you would invest 229.00 in European Residential Real on August 28, 2024 and sell it today you would earn a total of 132.00 from holding European Residential Real or generate 57.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.52% |
| Values | Daily Returns |
European Residential Real vs. Next Hydrogen Solutions
Performance |
| Timeline |
| European Residential Real |
| Next Hydrogen Solutions |
European Residential and Next Hydrogen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with European Residential and Next Hydrogen
The main advantage of trading using opposite European Residential and Next Hydrogen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if European Residential 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.| European Residential vs. BSR Real Estate | European Residential vs. Minto Apartment Real | European Residential vs. Nexus Real Estate | European Residential vs. Morguard North American |
| Next Hydrogen vs. Economic Investment Trust | Next Hydrogen vs. Postmedia Network Canada | Next Hydrogen vs. 2028 Investment Grade | Next Hydrogen vs. Monument Mining Limited |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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