Correlation Between Autoliv and Hesai Group
Can any of the company-specific risk be diversified away by investing in both Autoliv 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 Autoliv and Hesai Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Autoliv and Hesai Group American, you can compare the effects of market volatilities on Autoliv 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 Autoliv with a short position of Hesai Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Autoliv and Hesai Group.
Diversification Opportunities for Autoliv and Hesai Group
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Autoliv and Hesai is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Autoliv 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 Autoliv 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 Autoliv 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 Autoliv i.e., Autoliv and Hesai Group go up and down completely randomly.
Pair Corralation between Autoliv and Hesai Group
Considering the 90-day investment horizon Autoliv is expected to generate 0.34 times more return on investment than Hesai Group. However, Autoliv is 2.94 times less risky than Hesai Group. It trades about 0.0 of its potential returns per unit of risk. Hesai Group American is currently generating about -0.03 per unit of risk. If you would invest 10,316 in Autoliv on August 27, 2024 and sell it today you would lose (427.00) from holding Autoliv or give up 4.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Autoliv vs. Hesai Group American
Performance |
| Timeline |
| Autoliv |
| Hesai Group American |
Autoliv and Hesai Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Autoliv and Hesai Group
The main advantage of trading using opposite Autoliv and Hesai Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Autoliv 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.The idea behind Autoliv and Hesai Group American 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.| Hesai Group vs. Zhihu Inc ADR | Hesai Group vs. Integrated Drilling Equipment | Hesai Group vs. Cabo Drilling Corp | Hesai Group vs. Tenaris SA ADR |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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