Correlation Between Green Hydrogen and Trifork Holding

Can any of the company-specific risk be diversified away by investing in both Green Hydrogen and Trifork Holding 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 Trifork Holding 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 Trifork Holding AG, you can compare the effects of market volatilities on Green Hydrogen and Trifork Holding 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 Trifork Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Green Hydrogen and Trifork Holding.

Diversification Opportunities for Green Hydrogen and Trifork Holding

0.69

Correlation Coefficient

Green Hydrogen  Trifork Holding

Poor diversification

The 3 months correlation between Green and Trifork is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Green Hydrogen Systems and Trifork Holding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trifork Holding AG 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 Trifork Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trifork Holding AG has no effect on the direction of Green Hydrogen i.e., Green Hydrogen and Trifork Holding go up and down completely randomly.

Pair Corralation between Green Hydrogen and Trifork Holding

Assuming the 90 days trading horizon Green Hydrogen Systems is expected to under-perform the Trifork Holding. In addition to that, Green Hydrogen is 4.06 times more volatile than Trifork Holding AG. It trades about -0.04 of its total potential returns per unit of risk. Trifork Holding AG is currently generating about -0.11 per unit of volatility. If you would invest  9,450  in Trifork Holding AG on September 5, 2024 and sell it today you would lose (1,550) from holding Trifork Holding AG or give up 16.4% of portfolio value over 90 days.

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

Green Hydrogen Systems  vs.  Trifork Holding AG

Green Hydrogen Systems

Risk-Adjusted Performance

0 of 100

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 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 January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Trifork Holding AG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Trifork Holding AG has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's forward indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Green Hydrogen and Trifork Holding

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

The idea behind Green Hydrogen Systems and Trifork Holding AG 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.