Correlation Between Icape Holding and Hydrogene

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Can any of the company-specific risk be diversified away by investing in both Icape Holding and Hydrogene 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 Icape Holding and Hydrogene into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Icape Holding and Hydrogene De France, you can compare the effects of market volatilities on Icape Holding and Hydrogene 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 Icape Holding with a short position of Hydrogene. Check out your portfolio center. Please also check ongoing floating volatility patterns of Icape Holding and Hydrogene.

Diversification Opportunities for Icape Holding and Hydrogene

0.28
  Correlation Coefficient

Modest diversification

The 3 months correlation between Icape and Hydrogene is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Icape Holding and Hydrogene De France in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hydrogene De France and Icape Holding 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 Icape Holding are associated (or correlated) with Hydrogene. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hydrogene De France has no effect on the direction of Icape Holding i.e., Icape Holding and Hydrogene go up and down completely randomly.

Pair Corralation between Icape Holding and Hydrogene

Assuming the 90 days trading horizon Icape Holding is expected to generate 3.59 times more return on investment than Hydrogene. However, Icape Holding is 3.59 times more volatile than Hydrogene De France. It trades about 0.24 of its potential returns per unit of risk. Hydrogene De France is currently generating about 0.03 per unit of risk. If you would invest  746.00  in Icape Holding on October 22, 2024 and sell it today you would earn a total of  184.00  from holding Icape Holding or generate 24.66% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy94.74%
ValuesDaily Returns

Icape Holding  vs.  Hydrogene De France

 Performance 
       Timeline  
Icape Holding 

Risk-Adjusted Performance

3 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Icape Holding are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Icape Holding may actually be approaching a critical reversion point that can send shares even higher in February 2025.
Hydrogene De France 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Hydrogene De France has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's technical and fundamental indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Icape Holding and Hydrogene Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Icape Holding and Hydrogene

The main advantage of trading using opposite Icape Holding and Hydrogene positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Icape Holding position performs unexpectedly, Hydrogene 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 Hydrogene will offset losses from the drop in Hydrogene's long position.
The idea behind Icape Holding and Hydrogene De France pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.

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