Correlation Between Hydrogen Freehold and BA Airport

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

By analyzing existing cross correlation between Hydrogen Freehold Leasehold and BA Airport Leasehold, you can compare the effects of market volatilities on Hydrogen Freehold and BA Airport 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 Hydrogen Freehold with a short position of BA Airport. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hydrogen Freehold and BA Airport.

Diversification Opportunities for Hydrogen Freehold and BA Airport

-0.53

Correlation Coefficient

Hydrogen Freehold  BA Airport

Excellent diversification

The 3 months correlation between Hydrogen and BAREIT is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Hydrogen Freehold Leasehold and BA Airport Leasehold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BA Airport Leasehold and Hydrogen Freehold 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 Hydrogen Freehold Leasehold are associated (or correlated) with BA Airport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BA Airport Leasehold has no effect on the direction of Hydrogen Freehold i.e., Hydrogen Freehold and BA Airport go up and down completely randomly.

Pair Corralation between Hydrogen Freehold and BA Airport

Assuming the 90 days trading horizon Hydrogen Freehold Leasehold is expected to under-perform the BA Airport. But the stock apears to be less risky and, when comparing its historical volatility, Hydrogen Freehold Leasehold is 1.45 times less risky than BA Airport. The stock trades about -0.18 of its potential returns per unit of risk. The BA Airport Leasehold is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  921.00  in BA Airport Leasehold on December 30, 2024 and sell it today you would earn a total of  9.00  from holding BA Airport Leasehold or generate 0.98% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.41%
Values	Daily Returns

Hydrogen Freehold Leasehold  vs.  BA Airport Leasehold

Hydrogen Freehold

Risk-Adjusted Performance

Very Weak

Over the last 90 days Hydrogen Freehold Leasehold has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

BA Airport Leasehold

Risk-Adjusted Performance

Weak

Over the last 90 days BA Airport Leasehold has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, BA Airport is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Hydrogen Freehold and BA Airport

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

The idea behind Hydrogen Freehold Leasehold and BA Airport Leasehold 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.