Correlation Between Next Hydrogen and Nel ASA

Can any of the company-specific risk be diversified away by investing in both Next Hydrogen and Nel ASA 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 Nel ASA 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 Nel ASA, you can compare the effects of market volatilities on Next Hydrogen and Nel ASA 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 Nel ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Next Hydrogen and Nel ASA.

Diversification Opportunities for Next Hydrogen and Nel ASA

-0.64

Correlation Coefficient

Next Hydrogen  Nel ASA

Excellent diversification

The 3 months correlation between Next and Nel is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Next Hydrogen Solutions and Nel ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nel ASA 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 Nel ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nel ASA has no effect on the direction of Next Hydrogen i.e., Next Hydrogen and Nel ASA go up and down completely randomly.

Pair Corralation between Next Hydrogen and Nel ASA

Assuming the 90 days horizon Next Hydrogen is expected to generate 2.24 times less return on investment than Nel ASA. In addition to that, Next Hydrogen is 1.48 times more volatile than Nel ASA. It trades about 0.02 of its total potential returns per unit of risk. Nel ASA is currently generating about 0.06 per unit of volatility. If you would invest  23.00  in Nel ASA on May 6, 2025 and sell it today you would earn a total of  3.00  from holding Nel ASA or generate 13.04% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	96.88%
Values	Daily Returns

Next Hydrogen Solutions  vs.  Nel ASA

Next Hydrogen Solutions

Risk-Adjusted Performance

Weak

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

Nel ASA

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Nel ASA are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Nel ASA reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Next Hydrogen and Nel ASA

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

The idea behind Next Hydrogen Solutions and Nel ASA 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 CEOs Directory module to screen CEOs from public companies around the world.