Correlation Between Hyliion Holdings and Kongsberg Automotive
Can any of the company-specific risk be diversified away by investing in both Hyliion Holdings and Kongsberg Automotive 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 Hyliion Holdings and Kongsberg Automotive into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hyliion Holdings Corp and Kongsberg Automotive ASA, you can compare the effects of market volatilities on Hyliion Holdings and Kongsberg Automotive 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 Hyliion Holdings with a short position of Kongsberg Automotive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyliion Holdings and Kongsberg Automotive.
Diversification Opportunities for Hyliion Holdings and Kongsberg Automotive
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hyliion and Kongsberg is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Hyliion Holdings Corp and Kongsberg Automotive ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kongsberg Automotive ASA and Hyliion Holdings 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 Hyliion Holdings Corp are associated (or correlated) with Kongsberg Automotive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kongsberg Automotive ASA has no effect on the direction of Hyliion Holdings i.e., Hyliion Holdings and Kongsberg Automotive go up and down completely randomly.
Pair Corralation between Hyliion Holdings and Kongsberg Automotive
Given the investment horizon of 90 days Hyliion Holdings Corp is expected to generate 1.85 times more return on investment than Kongsberg Automotive. However, Hyliion Holdings is 1.85 times more volatile than Kongsberg Automotive ASA. It trades about 0.02 of its potential returns per unit of risk. Kongsberg Automotive ASA is currently generating about -0.03 per unit of risk. If you would invest 318.00 in Hyliion Holdings Corp on October 9, 2024 and sell it today you would lose (58.00) from holding Hyliion Holdings Corp or give up 18.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hyliion Holdings Corp vs. Kongsberg Automotive ASA
Performance |
| Timeline |
| Hyliion Holdings Corp |
| Kongsberg Automotive ASA |
Hyliion Holdings and Kongsberg Automotive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyliion Holdings and Kongsberg Automotive
The main advantage of trading using opposite Hyliion Holdings and Kongsberg Automotive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyliion Holdings position performs unexpectedly, Kongsberg Automotive 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 Kongsberg Automotive will offset losses from the drop in Kongsberg Automotive's long position.| Hyliion Holdings vs. Quantumscape Corp | Hyliion Holdings vs. Mobileye Global Class | Hyliion Holdings vs. Innoviz Technologies | Hyliion Holdings vs. Aeva Technologies |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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