Can any of the company-specific risk be diversified away by investing in both Next Hydrogen and Live Current 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 Live Current 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 Live Current Media, you can compare the effects of market volatilities on Next Hydrogen and Live Current 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 Live Current. Check out your portfolio center. Please also check ongoing floating volatility patterns of Next Hydrogen and Live Current.
Diversification Opportunities for Next Hydrogen and Live Current
The 3 months correlation between Next and Live is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Next Hydrogen Solutions and Live Current Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Live Current Media 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 Live Current. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Live Current Media has no effect on the direction of Next Hydrogen i.e., Next Hydrogen and Live Current go up and down completely randomly.
Pair Corralation between Next Hydrogen and Live Current
If you would invest 41.00 in Next Hydrogen Solutions on March 6, 2024 and sell it today you would earn a total of 5.00 from holding Next Hydrogen Solutions or generate 12.2% return on investment over 90 days.
Compared to the overall equity markets, risk-adjusted returns on investments in Next Hydrogen Solutions are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Next Hydrogen reported solid returns over the last few months and may actually be approaching a breakup point.
Over the last 90 days Live Current Media has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Live Current is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.