Correlation Between HYDRO and Puffer

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

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

Diversification Opportunities for HYDRO and Puffer

0.0

Correlation Coefficient

HYDRO  Puffer

Pay attention - limited upside

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

Pair Corralation between HYDRO and Puffer

If you would invest  25.00  in Puffer on May 7, 2025 and sell it today you would lose (4.00) from holding Puffer or give up 16.0% of portfolio value over 90 days.

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

HYDRO  vs.  Puffer

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.

Puffer

Risk-Adjusted Performance

Very Weak

Over the last 90 days Puffer has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong technical and fundamental indicators, Puffer is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with HYDRO and Puffer

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

The idea behind HYDRO and Puffer 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.