Correlation Between Hesai Group and Magna International
Can any of the company-specific risk be diversified away by investing in both Hesai Group and Magna International 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 Magna International 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 Magna International, you can compare the effects of market volatilities on Hesai Group and Magna International 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 Magna International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hesai Group and Magna International.
Diversification Opportunities for Hesai Group and Magna International
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hesai and Magna is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Hesai Group American and Magna International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magna International 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 Magna International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Magna International has no effect on the direction of Hesai Group i.e., Hesai Group and Magna International go up and down completely randomly.
Pair Corralation between Hesai Group and Magna International
Given the investment horizon of 90 days Hesai Group American is expected to generate 3.1 times more return on investment than Magna International. However, Hesai Group is 3.1 times more volatile than Magna International. It trades about 0.01 of its potential returns per unit of risk. Magna International is currently generating about -0.02 per unit of risk. If you would invest 988.00 in Hesai Group American on September 4, 2024 and sell it today you would lose (224.00) from holding Hesai Group American or give up 22.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hesai Group American vs. Magna International
Performance |
| Timeline |
| Hesai Group American |
| Magna International |
Hesai Group and Magna International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hesai Group and Magna International
The main advantage of trading using opposite Hesai Group and Magna International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hesai Group position performs unexpectedly, Magna International 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 Magna International will offset losses from the drop in Magna International's long position.| Hesai Group vs. PepsiCo | Hesai Group vs. Vita Coco | Hesai Group vs. Celsius Holdings | Hesai Group vs. Genfit |
| Magna International vs. Allison Transmission Holdings | Magna International vs. Aptiv PLC | Magna International vs. LKQ Corporation | Magna International vs. Lear Corporation |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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