Correlation Between Aeva Technologies and Hesai Group
Can any of the company-specific risk be diversified away by investing in both Aeva Technologies and Hesai Group 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 Aeva Technologies and Hesai Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aeva Technologies and Hesai Group American, you can compare the effects of market volatilities on Aeva Technologies and Hesai Group 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 Aeva Technologies with a short position of Hesai Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aeva Technologies and Hesai Group.
Diversification Opportunities for Aeva Technologies and Hesai Group
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Aeva and Hesai is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Aeva Technologies and Hesai Group American in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hesai Group American and Aeva Technologies 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 Aeva Technologies are associated (or correlated) with Hesai Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hesai Group American has no effect on the direction of Aeva Technologies i.e., Aeva Technologies and Hesai Group go up and down completely randomly.
Pair Corralation between Aeva Technologies and Hesai Group
Given the investment horizon of 90 days Aeva Technologies is expected to generate 2.55 times less return on investment than Hesai Group. But when comparing it to its historical volatility, Aeva Technologies is 1.78 times less risky than Hesai Group. It trades about 0.18 of its potential returns per unit of risk. Hesai Group American is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 1,105 in Hesai Group American on October 20, 2024 and sell it today you would earn a total of 454.00 from holding Hesai Group American or generate 41.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aeva Technologies vs. Hesai Group American
Performance |
| Timeline |
| Aeva Technologies |
| Hesai Group American |
Aeva Technologies and Hesai Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aeva Technologies and Hesai Group
The main advantage of trading using opposite Aeva Technologies and Hesai Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aeva Technologies position performs unexpectedly, Hesai Group 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 Hesai Group will offset losses from the drop in Hesai Group's long position.| Aeva Technologies vs. Innoviz Technologies | Aeva Technologies vs. Hesai Group American | Aeva Technologies vs. Luminar Technologies | Aeva Technologies vs. Aeye Inc |
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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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