Correlation Between Aeva Technologies and Hyliion Holdings
Can any of the company-specific risk be diversified away by investing in both Aeva Technologies and Hyliion Holdings 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 Hyliion Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aeva Technologies and Hyliion Holdings Corp, you can compare the effects of market volatilities on Aeva Technologies and Hyliion Holdings 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 Hyliion Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aeva Technologies and Hyliion Holdings.
Diversification Opportunities for Aeva Technologies and Hyliion Holdings
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Aeva and Hyliion is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Aeva Technologies and Hyliion Holdings Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyliion Holdings Corp 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 Hyliion Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyliion Holdings Corp has no effect on the direction of Aeva Technologies i.e., Aeva Technologies and Hyliion Holdings go up and down completely randomly.
Pair Corralation between Aeva Technologies and Hyliion Holdings
Given the investment horizon of 90 days Aeva Technologies is expected to generate 6.47 times less return on investment than Hyliion Holdings. But when comparing it to its historical volatility, Aeva Technologies is 1.33 times less risky than Hyliion Holdings. It trades about 0.06 of its potential returns per unit of risk. Hyliion Holdings Corp is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 240.00 in Hyliion Holdings Corp on August 26, 2024 and sell it today you would earn a total of 144.00 from holding Hyliion Holdings Corp or generate 60.0% 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. Hyliion Holdings Corp
Performance |
| Timeline |
| Aeva Technologies |
| Hyliion Holdings Corp |
Aeva Technologies and Hyliion Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aeva Technologies and Hyliion Holdings
The main advantage of trading using opposite Aeva Technologies and Hyliion Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aeva Technologies position performs unexpectedly, Hyliion Holdings 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 Hyliion Holdings will offset losses from the drop in Hyliion Holdings' long position.| Aeva Technologies vs. Innoviz Technologies | Aeva Technologies vs. Hesai Group American | Aeva Technologies vs. Luminar Technologies | Aeva Technologies vs. Aeye Inc |
| Hyliion Holdings vs. Quantumscape Corp | Hyliion Holdings vs. Mobileye Global Class | Hyliion Holdings vs. Innoviz Technologies | Hyliion Holdings vs. Aeva Technologies |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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