Correlation Between Next Hydrogen and Yokogawa Electric
Can any of the company-specific risk be diversified away by investing in both Next Hydrogen and Yokogawa Electric 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 Yokogawa Electric 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 Yokogawa Electric, you can compare the effects of market volatilities on Next Hydrogen and Yokogawa Electric 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 Yokogawa Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Next Hydrogen and Yokogawa Electric.
Diversification Opportunities for Next Hydrogen and Yokogawa Electric
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Next and Yokogawa is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Next Hydrogen Solutions and Yokogawa Electric in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yokogawa Electric 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 Yokogawa Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yokogawa Electric has no effect on the direction of Next Hydrogen i.e., Next Hydrogen and Yokogawa Electric go up and down completely randomly.
Pair Corralation between Next Hydrogen and Yokogawa Electric
Assuming the 90 days horizon Next Hydrogen Solutions is expected to generate 0.15 times more return on investment than Yokogawa Electric. However, Next Hydrogen Solutions is 6.47 times less risky than Yokogawa Electric. It trades about 0.04 of its potential returns per unit of risk. Yokogawa Electric is currently generating about -0.09 per unit of risk. 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 Together |
| Strength | Very Weak |
| Accuracy | 25.05% |
| Values | Daily Returns |
Next Hydrogen Solutions vs. Yokogawa Electric
Performance |
| Timeline |
| Next Hydrogen Solutions |
| Yokogawa Electric |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Next Hydrogen and Yokogawa Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Next Hydrogen and Yokogawa Electric
The main advantage of trading using opposite Next Hydrogen and Yokogawa Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Next Hydrogen position performs unexpectedly, Yokogawa Electric 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 Yokogawa Electric will offset losses from the drop in Yokogawa Electric'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 |
| Yokogawa Electric vs. Daifuku Co | Yokogawa Electric vs. Eaton PLC | Yokogawa Electric vs. Yokogawa Electric Corp | Yokogawa Electric vs. Nidec |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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