Correlation Between Hesai Group and Garrett Motion
Can any of the company-specific risk be diversified away by investing in both Hesai Group and Garrett Motion 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 Hesai Group and Garrett Motion into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hesai Group American and Garrett Motion, you can compare the effects of market volatilities on Hesai Group and Garrett Motion 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 Hesai Group with a short position of Garrett Motion. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hesai Group and Garrett Motion.
Diversification Opportunities for Hesai Group and Garrett Motion
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hesai and Garrett is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Hesai Group American and Garrett Motion in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Garrett Motion and Hesai Group 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 Hesai Group American are associated (or correlated) with Garrett Motion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Garrett Motion has no effect on the direction of Hesai Group i.e., Hesai Group and Garrett Motion go up and down completely randomly.
Pair Corralation between Hesai Group and Garrett Motion
Given the investment horizon of 90 days Hesai Group American is expected to generate 22.39 times more return on investment than Garrett Motion. However, Hesai Group is 22.39 times more volatile than Garrett Motion. It trades about 0.04 of its potential returns per unit of risk. Garrett Motion is currently generating about 0.02 per unit of risk. If you would invest 0.00 in Hesai Group American on August 23, 2024 and sell it today you would earn a total of 461.00 from holding Hesai Group American or generate 9.223372036854776E16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.93% |
| Values | Daily Returns |
Hesai Group American vs. Garrett Motion
Performance |
| Timeline |
| Hesai Group American |
| Garrett Motion |
Hesai Group and Garrett Motion Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hesai Group and Garrett Motion
The main advantage of trading using opposite Hesai Group and Garrett Motion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hesai Group position performs unexpectedly, Garrett Motion 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 Garrett Motion will offset losses from the drop in Garrett Motion's long position.| Hesai Group vs. Garrett Motion | Hesai Group vs. Magna International | Hesai Group vs. Miller Industries | Hesai Group vs. Modine Manufacturing |
| Garrett Motion vs. Gentex | Garrett Motion vs. Adient PLC | Garrett Motion vs. Autoliv | Garrett Motion vs. Fox Factory 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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