Correlation Between MPC Container and HydrogenPro

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

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

Diversification Opportunities for MPC Container and HydrogenPro

-0.3

Correlation Coefficient

MPC Container  HydrogenPro

Very good diversification

The 3 months correlation between MPC and HydrogenPro is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding MPC Container Ships and HydrogenPro AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HydrogenPro AS and MPC Container 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 MPC Container Ships are associated (or correlated) with HydrogenPro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HydrogenPro AS has no effect on the direction of MPC Container i.e., MPC Container and HydrogenPro go up and down completely randomly.

Pair Corralation between MPC Container and HydrogenPro

Assuming the 90 days trading horizon MPC Container Ships is expected to generate 0.86 times more return on investment than HydrogenPro. However, MPC Container Ships is 1.17 times less risky than HydrogenPro. It trades about 0.11 of its potential returns per unit of risk. HydrogenPro AS is currently generating about -0.12 per unit of risk. If you would invest  984.00  in MPC Container Ships on September 4, 2024 and sell it today you would earn a total of  1,191  from holding MPC Container Ships or generate 121.04% return on investment over 90 days.

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

MPC Container Ships  vs.  HydrogenPro AS

MPC Container Ships

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in MPC Container Ships are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting essential indicators, MPC Container may actually be approaching a critical reversion point that can send shares even higher in January 2025.

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.

Pair Trading with MPC Container and HydrogenPro

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

The idea behind MPC Container Ships and HydrogenPro AS 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.

Check out your portfolio center.

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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.