Correlation Between HydroGraph Clean and Johnson Matthey

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

By analyzing existing cross correlation between HydroGraph Clean Power and Johnson Matthey PLC, you can compare the effects of market volatilities on HydroGraph Clean and Johnson Matthey 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 HydroGraph Clean with a short position of Johnson Matthey. Check out your portfolio center. Please also check ongoing floating volatility patterns of HydroGraph Clean and Johnson Matthey.

Diversification Opportunities for HydroGraph Clean and Johnson Matthey

0.0

Correlation Coefficient

HydroGraph Clean  Johnson Matthey

Pay attention - limited upside

The 3 months correlation between HydroGraph and Johnson is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding HydroGraph Clean Power and Johnson Matthey PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Johnson Matthey PLC and HydroGraph Clean 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 HydroGraph Clean Power are associated (or correlated) with Johnson Matthey. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Johnson Matthey PLC has no effect on the direction of HydroGraph Clean i.e., HydroGraph Clean and Johnson Matthey go up and down completely randomly.

Pair Corralation between HydroGraph Clean and Johnson Matthey

If you would invest  3,309  in Johnson Matthey PLC on December 31, 2024 and sell it today you would earn a total of  214.00  from holding Johnson Matthey PLC or generate 6.47% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

HydroGraph Clean Power  vs.  Johnson Matthey PLC

HydroGraph Clean Power

Risk-Adjusted Performance

Very Weak

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

Johnson Matthey PLC

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Johnson Matthey PLC are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain essential indicators, Johnson Matthey may actually be approaching a critical reversion point that can send shares even higher in May 2025.

Pair Trading with HydroGraph Clean and Johnson Matthey

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

The idea behind HydroGraph Clean Power and Johnson Matthey PLC 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.