Correlation Between HYDRO and Bifrost

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

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

Diversification Opportunities for HYDRO and Bifrost

0.0

Correlation Coefficient

HYDRO  Bifrost

Pay attention - limited upside

The 3 months correlation between HYDRO and Bifrost is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding HYDRO and Bifrost in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bifrost and HYDRO 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 HYDRO are associated (or correlated) with Bifrost. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bifrost has no effect on the direction of HYDRO i.e., HYDRO and Bifrost go up and down completely randomly.

Pair Corralation between HYDRO and Bifrost

If you would invest  3.10  in Bifrost on May 7, 2025 and sell it today you would earn a total of  1.06  from holding Bifrost or generate 34.19% return on investment over 90 days.

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

HYDRO  vs.  Bifrost

HYDRO

Risk-Adjusted Performance

Very Weak

Over the last 90 days HYDRO has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, HYDRO is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Bifrost

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Bifrost are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Bifrost exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with HYDRO and Bifrost

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

The idea behind HYDRO and Bifrost 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 Stocks Directory module to find actively traded stocks across global markets.