Correlation Between Hydrogene and Making Science

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

Diversification Opportunities for Hydrogene and Making Science

0.4

Correlation Coefficient

Hydrogene  Making Science

Very weak diversification

The 3 months correlation between Hydrogene and Making is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Hydrogene De France and Making Science Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Making Science Group 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 Making Science. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Making Science Group has no effect on the direction of Hydrogene i.e., Hydrogene and Making Science go up and down completely randomly.

Pair Corralation between Hydrogene and Making Science

Assuming the 90 days trading horizon Hydrogene De France is expected to generate 4.3 times more return on investment than Making Science. However, Hydrogene is 4.3 times more volatile than Making Science Group. It trades about 0.17 of its potential returns per unit of risk. Making Science Group is currently generating about 0.17 per unit of risk. If you would invest  405.00  in Hydrogene De France on December 24, 2024 and sell it today you would earn a total of  243.00  from holding Hydrogene De France or generate 60.0% return on investment over 90 days.

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

Hydrogene De France  vs.  Making Science Group

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 13 (%) 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.

Making Science Group

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Making Science Group are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Making Science reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Hydrogene and Making Science

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

The idea behind Hydrogene De France and Making Science 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.