Correlation Between Goodyear Tire and HYZON Motors
Can any of the company-specific risk be diversified away by investing in both Goodyear Tire 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 Goodyear Tire and HYZON Motors into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Goodyear Tire Rubber and HYZON Motors, you can compare the effects of market volatilities on Goodyear Tire 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 Goodyear Tire with a short position of HYZON Motors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goodyear Tire and HYZON Motors.
Diversification Opportunities for Goodyear Tire and HYZON Motors
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Goodyear and HYZON is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Goodyear Tire Rubber and HYZON Motors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HYZON Motors and Goodyear Tire 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 Goodyear Tire Rubber 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 Goodyear Tire i.e., Goodyear Tire and HYZON Motors go up and down completely randomly.
Pair Corralation between Goodyear Tire and HYZON Motors
Allowing for the 90-day total investment horizon Goodyear Tire Rubber is expected to generate 0.47 times more return on investment than HYZON Motors. However, Goodyear Tire Rubber is 2.14 times less risky than HYZON Motors. It trades about 0.4 of its potential returns per unit of risk. HYZON Motors is currently generating about -0.09 per unit of risk. If you would invest 801.00 in Goodyear Tire Rubber on September 1, 2024 and sell it today you would earn a total of 273.00 from holding Goodyear Tire Rubber or generate 34.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Goodyear Tire Rubber vs. HYZON Motors
Performance |
| Timeline |
| Goodyear Tire Rubber |
| HYZON Motors |
Goodyear Tire and HYZON Motors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goodyear Tire and HYZON Motors
The main advantage of trading using opposite Goodyear Tire and HYZON Motors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goodyear Tire 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.| Goodyear Tire vs. Allison Transmission Holdings | Goodyear Tire vs. Aptiv PLC | Goodyear Tire vs. LKQ Corporation | Goodyear Tire vs. Lear Corporation |
| HYZON Motors vs. Ford Motor | HYZON Motors vs. General Motors | HYZON Motors vs. Goodyear Tire Rubber | HYZON Motors vs. Li Auto |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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