Correlation Between Hydrogen Engine and Alfen NV
Can any of the company-specific risk be diversified away by investing in both Hydrogen Engine and Alfen NV 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 Hydrogen Engine and Alfen NV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hydrogen Engine Center and Alfen NV, you can compare the effects of market volatilities on Hydrogen Engine and Alfen NV 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 Hydrogen Engine with a short position of Alfen NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hydrogen Engine and Alfen NV.
Diversification Opportunities for Hydrogen Engine and Alfen NV
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hydrogen and Alfen is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Hydrogen Engine Center and Alfen NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alfen NV and Hydrogen Engine 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 Hydrogen Engine Center are associated (or correlated) with Alfen NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alfen NV has no effect on the direction of Hydrogen Engine i.e., Hydrogen Engine and Alfen NV go up and down completely randomly.
Pair Corralation between Hydrogen Engine and Alfen NV
Given the investment horizon of 90 days Hydrogen Engine Center is expected to generate 33.25 times more return on investment than Alfen NV. However, Hydrogen Engine is 33.25 times more volatile than Alfen NV. It trades about 0.14 of its potential returns per unit of risk. Alfen NV is currently generating about -0.08 per unit of risk. If you would invest 0.01 in Hydrogen Engine Center on August 24, 2024 and sell it today you would earn a total of 0.59 from holding Hydrogen Engine Center or generate 5900.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hydrogen Engine Center vs. Alfen NV
Performance |
| Timeline |
| Hydrogen Engine Center |
| Alfen NV |
Hydrogen Engine and Alfen NV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hydrogen Engine and Alfen NV
The main advantage of trading using opposite Hydrogen Engine and Alfen NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hydrogen Engine position performs unexpectedly, Alfen NV 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 Alfen NV will offset losses from the drop in Alfen NV's long position.| Hydrogen Engine vs. FREYR Battery SA | Hydrogen Engine vs. nVent Electric PLC | Hydrogen Engine vs. Hubbell | Hydrogen Engine vs. Advanced Energy Industries |
| Alfen NV vs. Copa Holdings SA | Alfen NV vs. United Airlines Holdings | Alfen NV vs. Delta Air Lines | Alfen NV vs. SkyWest |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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