Correlation Between Hydrogen Engine and ADS TEC
Can any of the company-specific risk be diversified away by investing in both Hydrogen Engine and ADS TEC 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 ADS TEC 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 ADS TEC ENERGY PLC, you can compare the effects of market volatilities on Hydrogen Engine and ADS TEC 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 ADS TEC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hydrogen Engine and ADS TEC.
Diversification Opportunities for Hydrogen Engine and ADS TEC
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hydrogen and ADS is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Hydrogen Engine Center and ADS TEC ENERGY PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ADS TEC ENERGY 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 ADS TEC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ADS TEC ENERGY has no effect on the direction of Hydrogen Engine i.e., Hydrogen Engine and ADS TEC go up and down completely randomly.
Pair Corralation between Hydrogen Engine and ADS TEC
Given the investment horizon of 90 days Hydrogen Engine is expected to generate 1.95 times less return on investment than ADS TEC. But when comparing it to its historical volatility, Hydrogen Engine Center is 1.72 times less risky than ADS TEC. It trades about 0.12 of its potential returns per unit of risk. ADS TEC ENERGY PLC is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 245.00 in ADS TEC ENERGY PLC on September 3, 2024 and sell it today you would earn a total of 97.00 from holding ADS TEC ENERGY PLC or generate 39.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 91.16% |
| Values | Daily Returns |
Hydrogen Engine Center vs. ADS TEC ENERGY PLC
Performance |
| Timeline |
| Hydrogen Engine Center |
| ADS TEC ENERGY |
Hydrogen Engine and ADS TEC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hydrogen Engine and ADS TEC
The main advantage of trading using opposite Hydrogen Engine and ADS TEC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hydrogen Engine position performs unexpectedly, ADS TEC 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 ADS TEC will offset losses from the drop in ADS TEC's long position.| Hydrogen Engine vs. Hydrogen Hybrid Technologies | Hydrogen Engine vs. Manhattan Scients | Hydrogen Engine vs. SunHydrogen | Hydrogen Engine vs. AFC Energy plc |
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 Stocks Directory module to find actively traded stocks across global markets.
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