Correlation Between Next Hydrogen and Siemens AG
Can any of the company-specific risk be diversified away by investing in both Next Hydrogen and Siemens AG 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 Siemens AG 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 Siemens AG ADR, you can compare the effects of market volatilities on Next Hydrogen and Siemens AG 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 Siemens AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Next Hydrogen and Siemens AG.
Diversification Opportunities for Next Hydrogen and Siemens AG
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Next and Siemens is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Next Hydrogen Solutions and Siemens AG ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siemens AG ADR 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 Siemens AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siemens AG ADR has no effect on the direction of Next Hydrogen i.e., Next Hydrogen and Siemens AG go up and down completely randomly.
Pair Corralation between Next Hydrogen and Siemens AG
If you would invest 98.00 in Next Hydrogen Solutions on September 1, 2024 and sell it today you would lose (68.00) from holding Next Hydrogen Solutions or give up 69.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 0.22% |
| Values | Daily Returns |
Next Hydrogen Solutions vs. Siemens AG ADR
Performance |
| Timeline |
| Next Hydrogen Solutions |
| Siemens AG ADR |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Next Hydrogen and Siemens AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Next Hydrogen and Siemens AG
The main advantage of trading using opposite Next Hydrogen and Siemens AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Next Hydrogen position performs unexpectedly, Siemens AG 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 Siemens AG will offset losses from the drop in Siemens AG'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 |
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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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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