Correlation Between BAIC MotorLimited and Hyzon Motors
Can any of the company-specific risk be diversified away by investing in both BAIC MotorLimited and Hyzon Motors 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 BAIC MotorLimited and Hyzon Motors into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BAIC Motor and Hyzon Motors, you can compare the effects of market volatilities on BAIC MotorLimited and Hyzon Motors 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 BAIC MotorLimited with a short position of Hyzon Motors. Check out your portfolio center. Please also check ongoing floating volatility patterns of BAIC MotorLimited and Hyzon Motors.
Diversification Opportunities for BAIC MotorLimited and Hyzon Motors
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BAIC and Hyzon is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding BAIC Motor and Hyzon Motors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyzon Motors and BAIC MotorLimited 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 BAIC Motor are associated (or correlated) with Hyzon Motors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyzon Motors has no effect on the direction of BAIC MotorLimited i.e., BAIC MotorLimited and Hyzon Motors go up and down completely randomly.
Pair Corralation between BAIC MotorLimited and Hyzon Motors
Assuming the 90 days horizon BAIC Motor is expected to generate 0.56 times more return on investment than Hyzon Motors. However, BAIC Motor is 1.78 times less risky than Hyzon Motors. It trades about 0.19 of its potential returns per unit of risk. Hyzon Motors is currently generating about -0.06 per unit of risk. If you would invest 27.00 in BAIC Motor on August 31, 2024 and sell it today you would earn a total of 3.00 from holding BAIC Motor or generate 11.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BAIC Motor vs. Hyzon Motors
Performance |
| Timeline |
| BAIC MotorLimited |
| Hyzon Motors |
BAIC MotorLimited and Hyzon Motors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BAIC MotorLimited and Hyzon Motors
The main advantage of trading using opposite BAIC MotorLimited and Hyzon Motors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BAIC MotorLimited position performs unexpectedly, Hyzon Motors 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 Hyzon Motors will offset losses from the drop in Hyzon Motors' long position.| BAIC MotorLimited vs. Zapp Electric Vehicles | BAIC MotorLimited vs. First Hydrogen Corp | BAIC MotorLimited vs. Guangzhou Automobile Group | BAIC MotorLimited vs. Phoenix Motor Common |
| Hyzon Motors vs. Mullen Automotive | Hyzon Motors vs. Canoo Inc | Hyzon Motors vs. Faraday Future Intelligent | Hyzon Motors vs. Polestar Automotive Holding |
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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