Correlation Between Voltalia and Hydrogen Refueling

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

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

Diversification Opportunities for Voltalia and Hydrogen Refueling

0.59

Correlation Coefficient

Voltalia  Hydrogen Refueling

Very weak diversification

The 3 months correlation between Voltalia and Hydrogen is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Voltalia SA and Hydrogen Refueling Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hydrogen Refueling and Voltalia 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 Voltalia SA are associated (or correlated) with Hydrogen Refueling. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hydrogen Refueling has no effect on the direction of Voltalia i.e., Voltalia and Hydrogen Refueling go up and down completely randomly.

Pair Corralation between Voltalia and Hydrogen Refueling

Assuming the 90 days trading horizon Voltalia SA is expected to generate 0.92 times more return on investment than Hydrogen Refueling. However, Voltalia SA is 1.09 times less risky than Hydrogen Refueling. It trades about -0.04 of its potential returns per unit of risk. Hydrogen Refueling Solutions is currently generating about -0.1 per unit of risk. If you would invest  1,696  in Voltalia SA on September 14, 2024 and sell it today you would lose (985.00) from holding Voltalia SA or give up 58.08% of portfolio value over 90 days.

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

Voltalia SA  vs.  Hydrogen Refueling Solutions

Voltalia SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Voltalia SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Voltalia is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Hydrogen Refueling

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hydrogen Refueling Solutions 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.

Pair Trading with Voltalia and Hydrogen Refueling

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

The idea behind Voltalia SA and Hydrogen Refueling Solutions 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.