Correlation Between Solar Integrated and Newhydrogen

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

By analyzing existing cross correlation between Solar Integrated Roofing and Newhydrogen, you can compare the effects of market volatilities on Solar Integrated and Newhydrogen 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 Solar Integrated with a short position of Newhydrogen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Solar Integrated and Newhydrogen.

Diversification Opportunities for Solar Integrated and Newhydrogen

0.18

Correlation Coefficient

Solar Integrated  Newhydrogen

Average diversification

The 3 months correlation between Solar and Newhydrogen is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Solar Integrated Roofing and Newhydrogen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Newhydrogen and Solar Integrated 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 Solar Integrated Roofing are associated (or correlated) with Newhydrogen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Newhydrogen has no effect on the direction of Solar Integrated i.e., Solar Integrated and Newhydrogen go up and down completely randomly.

Pair Corralation between Solar Integrated and Newhydrogen

Given the investment horizon of 90 days Solar Integrated Roofing is expected to generate 5.14 times more return on investment than Newhydrogen. However, Solar Integrated is 5.14 times more volatile than Newhydrogen. It trades about 0.19 of its potential returns per unit of risk. Newhydrogen is currently generating about 0.02 per unit of risk. If you would invest  0.01  in Solar Integrated Roofing on September 2, 2024 and sell it today you would earn a total of  0.00  from holding Solar Integrated Roofing or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

Solar Integrated Roofing  vs.  Newhydrogen

Solar Integrated Roofing

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Solar Integrated Roofing are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of rather inconsistent basic indicators, Solar Integrated exhibited solid returns over the last few months and may actually be approaching a breakup point.

Newhydrogen

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Newhydrogen are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady basic indicators, Newhydrogen may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Solar Integrated and Newhydrogen

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

The idea behind Solar Integrated Roofing and Newhydrogen 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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.