Correlation Between Next Hydrogen and Capstone Green
Can any of the company-specific risk be diversified away by investing in both Next Hydrogen and Capstone Green 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 Next Hydrogen and Capstone Green into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Next Hydrogen Solutions and Capstone Green Energy, you can compare the effects of market volatilities on Next Hydrogen and Capstone Green 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 Next Hydrogen with a short position of Capstone Green. Check out your portfolio center. Please also check ongoing floating volatility patterns of Next Hydrogen and Capstone Green.
Diversification Opportunities for Next Hydrogen and Capstone Green
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Next and Capstone is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Next Hydrogen Solutions and Capstone Green Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capstone Green Energy and Next Hydrogen 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 Next Hydrogen Solutions are associated (or correlated) with Capstone Green. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capstone Green Energy has no effect on the direction of Next Hydrogen i.e., Next Hydrogen and Capstone Green go up and down completely randomly.
Pair Corralation between Next Hydrogen and Capstone Green
Assuming the 90 days horizon Next Hydrogen Solutions is expected to generate 3.85 times more return on investment than Capstone Green. However, Next Hydrogen is 3.85 times more volatile than Capstone Green Energy. It trades about 0.04 of its potential returns per unit of risk. Capstone Green Energy is currently generating about -0.03 per unit of risk. If you would invest 93.00 in Next Hydrogen Solutions on September 3, 2024 and sell it today you would lose (63.00) from holding Next Hydrogen Solutions or give up 67.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 30.91% |
| Values | Daily Returns |
Next Hydrogen Solutions vs. Capstone Green Energy
Performance |
| Timeline |
| Next Hydrogen Solutions |
| Capstone Green Energy |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Next Hydrogen and Capstone Green Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Next Hydrogen and Capstone Green
The main advantage of trading using opposite Next Hydrogen and Capstone Green positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Next Hydrogen position performs unexpectedly, Capstone Green 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 Capstone Green will offset losses from the drop in Capstone Green's long position.| Next Hydrogen vs. Weir Group PLC | Next Hydrogen vs. Greenshift Corp | Next Hydrogen vs. Quality Industrial Corp | Next Hydrogen vs. ITM Power Plc |
| Capstone Green vs. Nordson | Capstone Green vs. CVD Equipment | Capstone Green vs. Barnes Group | Capstone Green vs. Ametek Inc |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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