Correlation Between Garrett Motion and Hyzon Motors
Can any of the company-specific risk be diversified away by investing in both Garrett Motion 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 Garrett Motion and Hyzon Motors into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Garrett Motion and Hyzon Motors, you can compare the effects of market volatilities on Garrett Motion 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 Garrett Motion with a short position of Hyzon Motors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Garrett Motion and Hyzon Motors.
Diversification Opportunities for Garrett Motion and Hyzon Motors
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Garrett and Hyzon is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Garrett Motion and Hyzon Motors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyzon Motors and Garrett Motion 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 Garrett Motion 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 Garrett Motion i.e., Garrett Motion and Hyzon Motors go up and down completely randomly.
Pair Corralation between Garrett Motion and Hyzon Motors
Considering the 90-day investment horizon Garrett Motion is expected to generate 0.17 times more return on investment than Hyzon Motors. However, Garrett Motion is 5.94 times less risky than Hyzon Motors. It trades about 0.28 of its potential returns per unit of risk. Hyzon Motors is currently generating about -0.29 per unit of risk. If you would invest 891.00 in Garrett Motion on November 2, 2024 and sell it today you would earn a total of 67.00 from holding Garrett Motion or generate 7.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Garrett Motion vs. Hyzon Motors
Performance |
| Timeline |
| Garrett Motion |
| Hyzon Motors |
Garrett Motion and Hyzon Motors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Garrett Motion and Hyzon Motors
The main advantage of trading using opposite Garrett Motion and Hyzon Motors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Garrett Motion 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.| Garrett Motion vs. Resideo Technologies | Garrett Motion vs. AdvanSix | Garrett Motion vs. GrafTech International | Garrett Motion vs. Innoviva |
| 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 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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