Correlation Between HydrogenPro and Aker Carbon

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

By analyzing existing cross correlation between HydrogenPro AS and Aker Carbon Capture, you can compare the effects of market volatilities on HydrogenPro and Aker Carbon 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 HydrogenPro with a short position of Aker Carbon. Check out your portfolio center. Please also check ongoing floating volatility patterns of HydrogenPro and Aker Carbon.

Diversification Opportunities for HydrogenPro and Aker Carbon

0.42

Correlation Coefficient

HydrogenPro  Aker Carbon

Very weak diversification

The 3 months correlation between HydrogenPro and Aker is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding HydrogenPro AS and Aker Carbon Capture in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aker Carbon Capture and HydrogenPro 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 HydrogenPro AS are associated (or correlated) with Aker Carbon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aker Carbon Capture has no effect on the direction of HydrogenPro i.e., HydrogenPro and Aker Carbon go up and down completely randomly.

Pair Corralation between HydrogenPro and Aker Carbon

Assuming the 90 days trading horizon HydrogenPro AS is expected to under-perform the Aker Carbon. In addition to that, HydrogenPro is 2.07 times more volatile than Aker Carbon Capture. It trades about -0.25 of its total potential returns per unit of risk. Aker Carbon Capture is currently generating about -0.01 per unit of volatility. If you would invest  617.00  in Aker Carbon Capture on September 2, 2024 and sell it today you would lose (20.00) from holding Aker Carbon Capture or give up 3.24% of portfolio value over 90 days.

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

HydrogenPro AS  vs.  Aker Carbon Capture

HydrogenPro AS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days HydrogenPro AS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Aker Carbon Capture

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aker Carbon Capture has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent fundamental indicators, Aker Carbon is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with HydrogenPro and Aker Carbon

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

The idea behind HydrogenPro AS and Aker Carbon Capture 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.