Correlation Between Hydrogen Engine and AFC Energy
Can any of the company-specific risk be diversified away by investing in both Hydrogen Engine and AFC Energy 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 AFC Energy 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 AFC Energy plc, you can compare the effects of market volatilities on Hydrogen Engine and AFC Energy 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 AFC Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hydrogen Engine and AFC Energy.
Diversification Opportunities for Hydrogen Engine and AFC Energy
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hydrogen and AFC is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Hydrogen Engine Center and AFC Energy plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AFC Energy plc 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 AFC Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AFC Energy plc has no effect on the direction of Hydrogen Engine i.e., Hydrogen Engine and AFC Energy go up and down completely randomly.
Pair Corralation between Hydrogen Engine and AFC Energy
Given the investment horizon of 90 days Hydrogen Engine Center is expected to generate 13.93 times more return on investment than AFC Energy. However, Hydrogen Engine is 13.93 times more volatile than AFC Energy plc. It trades about 0.1 of its potential returns per unit of risk. AFC Energy plc is currently generating about -0.01 per unit of risk. If you would invest 0.09 in Hydrogen Engine Center on August 24, 2024 and sell it today you would earn a total of 0.51 from holding Hydrogen Engine Center or generate 566.67% 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. AFC Energy plc
Performance |
| Timeline |
| Hydrogen Engine Center |
| AFC Energy plc |
Hydrogen Engine and AFC Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hydrogen Engine and AFC Energy
The main advantage of trading using opposite Hydrogen Engine and AFC Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hydrogen Engine position performs unexpectedly, AFC Energy 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 AFC Energy will offset losses from the drop in AFC Energy'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 |
| AFC Energy vs. Legrand SA ADR | AFC Energy vs. Loop Energy | AFC Energy vs. Sunrise New Energy | AFC Energy vs. Alfen NV |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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