Correlation Between Continental Aktiengesellscha and Hyliion Holdings
Can any of the company-specific risk be diversified away by investing in both Continental Aktiengesellscha 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 Continental Aktiengesellscha and Hyliion Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Continental Aktiengesellschaft and Hyliion Holdings Corp, you can compare the effects of market volatilities on Continental Aktiengesellscha 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 Continental Aktiengesellscha with a short position of Hyliion Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Continental Aktiengesellscha and Hyliion Holdings.
Diversification Opportunities for Continental Aktiengesellscha and Hyliion Holdings
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Continental and Hyliion is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Continental Aktiengesellschaft 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 Continental Aktiengesellscha 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 Continental Aktiengesellschaft 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 Continental Aktiengesellscha i.e., Continental Aktiengesellscha and Hyliion Holdings go up and down completely randomly.
Pair Corralation between Continental Aktiengesellscha and Hyliion Holdings
Assuming the 90 days horizon Continental Aktiengesellschaft is expected to under-perform the Hyliion Holdings. But the pink sheet apears to be less risky and, when comparing its historical volatility, Continental Aktiengesellschaft is 1.89 times less risky than Hyliion Holdings. The pink sheet trades about -0.02 of its potential returns per unit of risk. The 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 Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Continental Aktiengesellschaft vs. Hyliion Holdings Corp
Performance |
| Timeline |
| Continental Aktiengesellscha |
| Hyliion Holdings Corp |
Continental Aktiengesellscha and Hyliion Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Continental Aktiengesellscha and Hyliion Holdings
The main advantage of trading using opposite Continental Aktiengesellscha and Hyliion Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Continental Aktiengesellscha 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.The idea behind Continental Aktiengesellschaft and Hyliion Holdings Corp 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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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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