Correlation Between Hydrogen Engine and Earthfirst Techs

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

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

Diversification Opportunities for Hydrogen Engine and Earthfirst Techs

0.0

Correlation Coefficient

Hydrogen Engine  Earthfirst Techs

Pay attention - limited upside

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

Pair Corralation between Hydrogen Engine and Earthfirst Techs

If you would invest  0.11  in Hydrogen Engine Center on December 21, 2024 and sell it today you would earn a total of  3.49  from holding Hydrogen Engine Center or generate 3172.73% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.67%
Values	Daily Returns

Hydrogen Engine Center  vs.  Earthfirst Techs

Hydrogen Engine Center

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Hydrogen Engine Center are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak technical and fundamental indicators, Hydrogen Engine reported solid returns over the last few months and may actually be approaching a breakup point.

Earthfirst Techs

Risk-Adjusted Performance

Very Weak

Over the last 90 days Earthfirst Techs has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Earthfirst Techs is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Hydrogen Engine and Earthfirst Techs

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

The idea behind Hydrogen Engine Center and Earthfirst Techs 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.