Correlation Between First Hydrogen and Polestar Automotive
Can any of the company-specific risk be diversified away by investing in both First Hydrogen and Polestar Automotive 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 Polestar Automotive 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 Polestar Automotive Holding, you can compare the effects of market volatilities on First Hydrogen and Polestar Automotive 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 Polestar Automotive. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Hydrogen and Polestar Automotive.
Diversification Opportunities for First Hydrogen and Polestar Automotive
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between First and Polestar is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding First Hydrogen Corp and Polestar Automotive Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Polestar Automotive 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 Polestar Automotive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Polestar Automotive has no effect on the direction of First Hydrogen i.e., First Hydrogen and Polestar Automotive go up and down completely randomly.
Pair Corralation between First Hydrogen and Polestar Automotive
Assuming the 90 days horizon First Hydrogen is expected to generate 3.46 times less return on investment than Polestar Automotive. But when comparing it to its historical volatility, First Hydrogen Corp is 2.83 times less risky than Polestar Automotive. It trades about 0.06 of its potential returns per unit of risk. Polestar Automotive Holding is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 15.00 in Polestar Automotive Holding on November 26, 2024 and sell it today you would earn a total of 4.41 from holding Polestar Automotive Holding or generate 29.4% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 98.36% |
Values | Daily Returns |
First Hydrogen Corp vs. Polestar Automotive Holding
Performance |
Timeline |
First Hydrogen Corp |
Polestar Automotive |
First Hydrogen and Polestar Automotive Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with First Hydrogen and Polestar Automotive
The main advantage of trading using opposite First Hydrogen and Polestar Automotive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Hydrogen position performs unexpectedly, Polestar Automotive 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 Polestar Automotive will offset losses from the drop in Polestar Automotive's long position.First Hydrogen vs. BAIC Motor | ||
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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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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