Correlation Between Green Hydrogen and Ennogie Solar

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

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

Diversification Opportunities for Green Hydrogen and Ennogie Solar

0.26

Correlation Coefficient

Green Hydrogen  Ennogie Solar

Modest diversification

The 3 months correlation between Green and Ennogie is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Green Hydrogen Systems and Ennogie Solar Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ennogie Solar Group and Green 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 Green Hydrogen Systems are associated (or correlated) with Ennogie Solar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ennogie Solar Group has no effect on the direction of Green Hydrogen i.e., Green Hydrogen and Ennogie Solar go up and down completely randomly.

Pair Corralation between Green Hydrogen and Ennogie Solar

Assuming the 90 days trading horizon Green Hydrogen Systems is expected to generate 1.5 times more return on investment than Ennogie Solar. However, Green Hydrogen is 1.5 times more volatile than Ennogie Solar Group. It trades about -0.04 of its potential returns per unit of risk. Ennogie Solar Group is currently generating about -0.06 per unit of risk. If you would invest  2,330  in Green Hydrogen Systems on December 2, 2024 and sell it today you would lose (2,046) from holding Green Hydrogen Systems or give up 87.81% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Green Hydrogen Systems  vs.  Ennogie Solar Group

Green Hydrogen Systems

Risk-Adjusted Performance

Very Weak

Over the last 90 days Green Hydrogen Systems has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Ennogie Solar Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ennogie Solar Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's technical and fundamental indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Green Hydrogen and Ennogie Solar

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

The idea behind Green Hydrogen Systems and Ennogie Solar 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.