Correlation Between GN Store and Green Hydrogen
Can any of the company-specific risk be diversified away by investing in both GN Store and Green 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 GN Store and Green Hydrogen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GN Store Nord and Green Hydrogen Systems, you can compare the effects of market volatilities on GN Store and Green 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 GN Store with a short position of Green Hydrogen. Check out your portfolio center. Please also check ongoing floating volatility patterns of GN Store and Green Hydrogen.
Diversification Opportunities for GN Store and Green Hydrogen
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between GN Store and Green is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding GN Store Nord and Green Hydrogen Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Green Hydrogen Systems and GN Store 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 GN Store Nord are associated (or correlated) with Green Hydrogen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Green Hydrogen Systems has no effect on the direction of GN Store i.e., GN Store and Green Hydrogen go up and down completely randomly.
Pair Corralation between GN Store and Green Hydrogen
Assuming the 90 days horizon GN Store is expected to generate 41.36 times less return on investment than Green Hydrogen. But when comparing it to its historical volatility, GN Store Nord is 3.57 times less risky than Green Hydrogen. It trades about 0.01 of its potential returns per unit of risk. Green Hydrogen Systems is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 220.00 in Green Hydrogen Systems on August 29, 2024 and sell it today you would earn a total of 62.00 from holding Green Hydrogen Systems or generate 28.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
GN Store Nord vs. Green Hydrogen Systems
Performance |
| Timeline |
| GN Store Nord |
| Green Hydrogen Systems |
GN Store and Green Hydrogen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GN Store and Green Hydrogen
The main advantage of trading using opposite GN Store and Green Hydrogen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GN Store position performs unexpectedly, Green 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 Green Hydrogen will offset losses from the drop in Green Hydrogen's long position.The idea behind GN Store Nord and Green Hydrogen Systems pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Green Hydrogen vs. Ambu AS | Green Hydrogen vs. GN Store Nord | Green Hydrogen vs. Bavarian Nordic | Green Hydrogen vs. FLSmidth Co |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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