Correlation Between Hydrogen Engine and Novonix
Can any of the company-specific risk be diversified away by investing in both Hydrogen Engine and Novonix 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 Novonix 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 Novonix Ltd ADR, you can compare the effects of market volatilities on Hydrogen Engine and Novonix 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 Novonix. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hydrogen Engine and Novonix.
Diversification Opportunities for Hydrogen Engine and Novonix
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hydrogen and Novonix is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Hydrogen Engine Center and Novonix Ltd ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Novonix Ltd ADR 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 Novonix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Novonix Ltd ADR has no effect on the direction of Hydrogen Engine i.e., Hydrogen Engine and Novonix go up and down completely randomly.
Pair Corralation between Hydrogen Engine and Novonix
Given the investment horizon of 90 days Hydrogen Engine Center is expected to generate 16.76 times more return on investment than Novonix. However, Hydrogen Engine is 16.76 times more volatile than Novonix Ltd ADR. It trades about 0.13 of its potential returns per unit of risk. Novonix Ltd ADR is currently generating about 0.03 per unit of risk. If you would invest 0.06 in Hydrogen Engine Center on September 1, 2024 and sell it today you would earn a total of 0.59 from holding Hydrogen Engine Center or generate 983.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.63% |
| Values | Daily Returns |
Hydrogen Engine Center vs. Novonix Ltd ADR
Performance |
| Timeline |
| Hydrogen Engine Center |
| Novonix Ltd ADR |
Hydrogen Engine and Novonix Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hydrogen Engine and Novonix
The main advantage of trading using opposite Hydrogen Engine and Novonix positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hydrogen Engine position performs unexpectedly, Novonix 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 Novonix will offset losses from the drop in Novonix's long position.| Hydrogen Engine vs. Hydrogen Hybrid Technologies | Hydrogen Engine vs. Manhattan Scients | Hydrogen Engine vs. SunHydrogen | Hydrogen Engine vs. AFC Energy plc |
| Novonix vs. Magnis Energy Technologies | Novonix vs. Exro Technologies | Novonix vs. Ilika plc | Novonix vs. FuelPositive Corp |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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