Correlation Between First Hydrogen and BAIC
Can any of the company-specific risk be diversified away by investing in both First Hydrogen and BAIC 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 First Hydrogen and BAIC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Hydrogen Corp and BAIC Motor, you can compare the effects of market volatilities on First Hydrogen and BAIC 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 First Hydrogen with a short position of BAIC. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Hydrogen and BAIC.
Diversification Opportunities for First Hydrogen and BAIC
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between First and BAIC is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding First Hydrogen Corp and BAIC Motor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BAIC Motor and First Hydrogen 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 First Hydrogen Corp are associated (or correlated) with BAIC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BAIC Motor has no effect on the direction of First Hydrogen i.e., First Hydrogen and BAIC go up and down completely randomly.
Pair Corralation between First Hydrogen and BAIC
Assuming the 90 days horizon First Hydrogen Corp is expected to generate 1.67 times more return on investment than BAIC. However, First Hydrogen is 1.67 times more volatile than BAIC Motor. It trades about 0.12 of its potential returns per unit of risk. BAIC Motor is currently generating about -0.13 per unit of risk. If you would invest 24.00 in First Hydrogen Corp on October 23, 2024 and sell it today you would earn a total of 2.00 from holding First Hydrogen Corp or generate 8.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Hydrogen Corp vs. BAIC Motor
Performance |
| Timeline |
| First Hydrogen Corp |
| BAIC Motor |
First Hydrogen and BAIC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Hydrogen and BAIC
The main advantage of trading using opposite First Hydrogen and BAIC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Hydrogen position performs unexpectedly, BAIC 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 BAIC will offset losses from the drop in BAIC's long position.| First Hydrogen vs. BAIC Motor | First Hydrogen vs. Zapp Electric Vehicles | First Hydrogen vs. Guangzhou Automobile Group | First Hydrogen vs. Phoenix Motor Common |
| BAIC vs. Zapp Electric Vehicles | BAIC vs. First Hydrogen Corp | BAIC vs. Guangzhou Automobile Group | BAIC vs. Phoenix Motor Common |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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