Correlation Between Hydrogene and Grolleau SAS

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

By analyzing existing cross correlation between Hydrogene De France and Grolleau SAS, you can compare the effects of market volatilities on Hydrogene and Grolleau SAS 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 Hydrogene with a short position of Grolleau SAS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hydrogene and Grolleau SAS.

Diversification Opportunities for Hydrogene and Grolleau SAS

-0.43

Correlation Coefficient

Hydrogene  Grolleau SAS

Very good diversification

The 3 months correlation between Hydrogene and Grolleau is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Hydrogene De France and Grolleau SAS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grolleau SAS and Hydrogene 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 Hydrogene De France are associated (or correlated) with Grolleau SAS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grolleau SAS has no effect on the direction of Hydrogene i.e., Hydrogene and Grolleau SAS go up and down completely randomly.

Pair Corralation between Hydrogene and Grolleau SAS

Assuming the 90 days trading horizon Hydrogene De France is expected to generate 1.54 times more return on investment than Grolleau SAS. However, Hydrogene is 1.54 times more volatile than Grolleau SAS. It trades about 0.16 of its potential returns per unit of risk. Grolleau SAS is currently generating about -0.02 per unit of risk. If you would invest  405.00  in Hydrogene De France on December 26, 2024 and sell it today you would earn a total of  225.00  from holding Hydrogene De France or generate 55.56% return on investment over 90 days.

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

Hydrogene De France  vs.  Grolleau SAS

Hydrogene De France

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Hydrogene De France are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak technical and fundamental indicators, Hydrogene sustained solid returns over the last few months and may actually be approaching a breakup point.

Grolleau SAS

Risk-Adjusted Performance

Very Weak

Over the last 90 days Grolleau SAS has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Grolleau SAS is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Hydrogene and Grolleau SAS

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

The idea behind Hydrogene De France and Grolleau SAS 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.