Correlation Between First Hydrogen and NFI

Can any of the company-specific risk be diversified away by investing in both First Hydrogen and NFI 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 First Hydrogen and NFI into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between First Hydrogen Corp and NFI Group, you can compare the effects of market volatilities on First Hydrogen and NFI 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 First Hydrogen with a short position of NFI. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Hydrogen and NFI.

Diversification Opportunities for First Hydrogen and NFI

-0.02

Correlation Coefficient

First Hydrogen  NFI

Good diversification

The 3 months correlation between First and NFI is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding First Hydrogen Corp and NFI Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NFI Group and First 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 First Hydrogen Corp are associated (or correlated) with NFI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NFI Group has no effect on the direction of First Hydrogen i.e., First Hydrogen and NFI go up and down completely randomly.

Pair Corralation between First Hydrogen and NFI

Assuming the 90 days horizon First Hydrogen Corp is expected to generate 1.91 times more return on investment than NFI. However, First Hydrogen is 1.91 times more volatile than NFI Group. It trades about 0.1 of its potential returns per unit of risk. NFI Group is currently generating about -0.02 per unit of risk. If you would invest  26.00  in First Hydrogen Corp on December 27, 2024 and sell it today you would earn a total of  11.00  from holding First Hydrogen Corp or generate 42.31% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

First Hydrogen Corp  vs.  NFI Group

First Hydrogen Corp

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in First Hydrogen Corp are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile fundamental indicators, First Hydrogen reported solid returns over the last few months and may actually be approaching a breakup point.

NFI Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days NFI Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, NFI is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with First Hydrogen and NFI

The main advantage of trading using opposite First Hydrogen and NFI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Hydrogen position performs unexpectedly, NFI 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 NFI will offset losses from the drop in NFI's long position.

The idea behind First Hydrogen Corp and NFI Group 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.