Correlation Between Hyliion Holdings and Douglas Dynamics
Can any of the company-specific risk be diversified away by investing in both Hyliion Holdings and Douglas Dynamics 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 Douglas Dynamics 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 Douglas Dynamics, you can compare the effects of market volatilities on Hyliion Holdings and Douglas Dynamics 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 Douglas Dynamics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyliion Holdings and Douglas Dynamics.
Diversification Opportunities for Hyliion Holdings and Douglas Dynamics
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hyliion and Douglas is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Hyliion Holdings Corp and Douglas Dynamics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Douglas Dynamics 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 Douglas Dynamics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Douglas Dynamics has no effect on the direction of Hyliion Holdings i.e., Hyliion Holdings and Douglas Dynamics go up and down completely randomly.
Pair Corralation between Hyliion Holdings and Douglas Dynamics
Given the investment horizon of 90 days Hyliion Holdings Corp is expected to generate 3.25 times more return on investment than Douglas Dynamics. However, Hyliion Holdings is 3.25 times more volatile than Douglas Dynamics. It trades about 0.26 of its potential returns per unit of risk. Douglas Dynamics is currently generating about 0.23 per unit of risk. If you would invest 253.00 in Hyliion Holdings Corp on August 30, 2024 and sell it today you would earn a total of 118.00 from holding Hyliion Holdings Corp or generate 46.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Hyliion Holdings Corp vs. Douglas Dynamics
Performance |
| Timeline |
| Hyliion Holdings Corp |
| Douglas Dynamics |
Hyliion Holdings and Douglas Dynamics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyliion Holdings and Douglas Dynamics
The main advantage of trading using opposite Hyliion Holdings and Douglas Dynamics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyliion Holdings position performs unexpectedly, Douglas Dynamics 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 Douglas Dynamics will offset losses from the drop in Douglas Dynamics' long position.| Hyliion Holdings vs. Quantumscape Corp | Hyliion Holdings vs. Mobileye Global Class | Hyliion Holdings vs. Innoviz Technologies | Hyliion Holdings vs. Aeva Technologies |
| Douglas Dynamics vs. Monro Muffler Brake | Douglas Dynamics vs. Motorcar Parts of | Douglas Dynamics vs. Standard Motor Products | Douglas Dynamics vs. Stoneridge |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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