Correlation Between Next Hydrogen and Greenland Technologies

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

By analyzing existing cross correlation between Next Hydrogen Solutions and Greenland Technologies Holding, you can compare the effects of market volatilities on Next Hydrogen and Greenland Technologies 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 Next Hydrogen with a short position of Greenland Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Next Hydrogen and Greenland Technologies.

Diversification Opportunities for Next Hydrogen and Greenland Technologies

0.44

Correlation Coefficient

Next Hydrogen  Greenland Technologies

Very weak diversification

The 3 months correlation between Next and Greenland is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Next Hydrogen Solutions and Greenland Technologies Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greenland Technologies and Next Hydrogen 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 Next Hydrogen Solutions are associated (or correlated) with Greenland Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greenland Technologies has no effect on the direction of Next Hydrogen i.e., Next Hydrogen and Greenland Technologies go up and down completely randomly.

Pair Corralation between Next Hydrogen and Greenland Technologies

If you would invest  5.20  in Greenland Technologies Holding on September 5, 2024 and sell it today you would earn a total of  0.00  from holding Greenland Technologies Holding or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	4.76%
Values	Daily Returns

Next Hydrogen Solutions  vs.  Greenland Technologies Holding

Next Hydrogen Solutions

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Next Hydrogen Solutions are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Next Hydrogen reported solid returns over the last few months and may actually be approaching a breakup point.

Greenland Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Greenland Technologies Holding has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable fundamental indicators, Greenland Technologies is not utilizing all of its potentials. The newest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Next Hydrogen and Greenland Technologies

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

The idea behind Next Hydrogen Solutions and Greenland Technologies Holding 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.