Correlation Between Next Hydrogen and CVD Equipment
Can any of the company-specific risk be diversified away by investing in both Next Hydrogen and CVD Equipment 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 CVD Equipment 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 CVD Equipment, you can compare the effects of market volatilities on Next Hydrogen and CVD Equipment 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 CVD Equipment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Next Hydrogen and CVD Equipment.
Diversification Opportunities for Next Hydrogen and CVD Equipment
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Next and CVD is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Next Hydrogen Solutions and CVD Equipment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CVD Equipment 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 CVD Equipment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CVD Equipment has no effect on the direction of Next Hydrogen i.e., Next Hydrogen and CVD Equipment go up and down completely randomly.
Pair Corralation between Next Hydrogen and CVD Equipment
Assuming the 90 days horizon Next Hydrogen Solutions is expected to under-perform the CVD Equipment. In addition to that, Next Hydrogen is 2.09 times more volatile than CVD Equipment. It trades about -0.11 of its total potential returns per unit of risk. CVD Equipment is currently generating about 0.1 per unit of volatility. If you would invest 295.00 in CVD Equipment on September 2, 2024 and sell it today you would earn a total of 24.00 from holding CVD Equipment or generate 8.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Next Hydrogen Solutions vs. CVD Equipment
Performance |
| Timeline |
| Next Hydrogen Solutions |
| CVD Equipment |
Next Hydrogen and CVD Equipment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Next Hydrogen and CVD Equipment
The main advantage of trading using opposite Next Hydrogen and CVD Equipment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Next Hydrogen position performs unexpectedly, CVD Equipment 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 CVD Equipment will offset losses from the drop in CVD Equipment'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 |
| CVD Equipment vs. NXP Semiconductors NV | CVD Equipment vs. GSI Technology | CVD Equipment vs. MaxLinear | CVD Equipment vs. Texas Instruments Incorporated |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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