Correlation Between Lhyfe SA and Hydrogene

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

By analyzing existing cross correlation between Lhyfe SA and Hydrogene De France, you can compare the effects of market volatilities on Lhyfe SA and Hydrogene 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 Lhyfe SA with a short position of Hydrogene. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lhyfe SA and Hydrogene.

Diversification Opportunities for Lhyfe SA and Hydrogene

0.7

Correlation Coefficient

Lhyfe SA  Hydrogene

Poor diversification

The 3 months correlation between Lhyfe and Hydrogene is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Lhyfe SA and Hydrogene De France in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hydrogene De France and Lhyfe SA 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 Lhyfe SA are associated (or correlated) with Hydrogene. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hydrogene De France has no effect on the direction of Lhyfe SA i.e., Lhyfe SA and Hydrogene go up and down completely randomly.

Pair Corralation between Lhyfe SA and Hydrogene

Assuming the 90 days trading horizon Lhyfe SA is expected to generate 0.89 times more return on investment than Hydrogene. However, Lhyfe SA is 1.13 times less risky than Hydrogene. It trades about -0.16 of its potential returns per unit of risk. Hydrogene De France is currently generating about -0.36 per unit of risk. If you would invest  391.00  in Lhyfe SA on September 3, 2024 and sell it today you would lose (86.00) from holding Lhyfe SA or give up 21.99% of portfolio value over 90 days.

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

Lhyfe SA  vs.  Hydrogene De France

Lhyfe SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lhyfe SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Hydrogene De France

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hydrogene De France has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's technical and fundamental indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Lhyfe SA and Hydrogene

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

The idea behind Lhyfe SA and Hydrogene De France 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.