Correlation Between Zealand Pharma and Green Hydrogen
Can any of the company-specific risk be diversified away by investing in both Zealand Pharma and Green Hydrogen 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 Zealand Pharma and Green Hydrogen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Zealand Pharma AS and Green Hydrogen Systems, you can compare the effects of market volatilities on Zealand Pharma and Green Hydrogen 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 Zealand Pharma with a short position of Green Hydrogen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zealand Pharma and Green Hydrogen.
Diversification Opportunities for Zealand Pharma and Green Hydrogen
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Zealand and Green is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Zealand Pharma AS and Green Hydrogen Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Green Hydrogen Systems and Zealand Pharma 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 Zealand Pharma AS are associated (or correlated) with Green Hydrogen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Green Hydrogen Systems has no effect on the direction of Zealand Pharma i.e., Zealand Pharma and Green Hydrogen go up and down completely randomly.
Pair Corralation between Zealand Pharma and Green Hydrogen
Assuming the 90 days trading horizon Zealand Pharma AS is expected to generate 0.67 times more return on investment than Green Hydrogen. However, Zealand Pharma AS is 1.49 times less risky than Green Hydrogen. It trades about 0.1 of its potential returns per unit of risk. Green Hydrogen Systems is currently generating about -0.04 per unit of risk. If you would invest 30,040 in Zealand Pharma AS on August 25, 2024 and sell it today you would earn a total of 42,610 from holding Zealand Pharma AS or generate 141.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zealand Pharma AS vs. Green Hydrogen Systems
Performance |
| Timeline |
| Zealand Pharma AS |
| Green Hydrogen Systems |
Zealand Pharma and Green Hydrogen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zealand Pharma and Green Hydrogen
The main advantage of trading using opposite Zealand Pharma and Green Hydrogen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zealand Pharma position performs unexpectedly, Green Hydrogen 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 Green Hydrogen will offset losses from the drop in Green Hydrogen's long position.| Zealand Pharma vs. Bavarian Nordic | Zealand Pharma vs. Ambu AS | Zealand Pharma vs. Genmab AS | Zealand Pharma vs. ALK Abell AS |
| Green Hydrogen vs. Ambu AS | Green Hydrogen vs. GN Store Nord | Green Hydrogen vs. Bavarian Nordic | Green Hydrogen vs. FLSmidth Co |
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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