Correlation Between Hyzon Motors and Polestar Automotive
Can any of the company-specific risk be diversified away by investing in both Hyzon Motors and Polestar 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 Hyzon Motors and Polestar Automotive into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hyzon Motors and Polestar Automotive Holding, you can compare the effects of market volatilities on Hyzon Motors and Polestar 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 Hyzon Motors with a short position of Polestar Automotive. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyzon Motors and Polestar Automotive.
Diversification Opportunities for Hyzon Motors and Polestar Automotive
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Hyzon and Polestar is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Hyzon Motors and Polestar Automotive Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Polestar Automotive and Hyzon Motors 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 Hyzon Motors are associated (or correlated) with Polestar Automotive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Polestar Automotive has no effect on the direction of Hyzon Motors i.e., Hyzon Motors and Polestar Automotive go up and down completely randomly.
Pair Corralation between Hyzon Motors and Polestar Automotive
Given the investment horizon of 90 days Hyzon Motors is expected to generate 0.95 times more return on investment than Polestar Automotive. However, Hyzon Motors is 1.05 times less risky than Polestar Automotive. It trades about -0.1 of its potential returns per unit of risk. Polestar Automotive Holding is currently generating about -0.16 per unit of risk. If you would invest 192.00 in Hyzon Motors on August 27, 2024 and sell it today you would lose (22.00) from holding Hyzon Motors or give up 11.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hyzon Motors vs. Polestar Automotive Holding
Performance |
| Timeline |
| Hyzon Motors |
| Polestar Automotive |
Hyzon Motors and Polestar Automotive Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyzon Motors and Polestar Automotive
The main advantage of trading using opposite Hyzon Motors and Polestar Automotive positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyzon Motors position performs unexpectedly, Polestar 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 Polestar Automotive will offset losses from the drop in Polestar Automotive's long position.| Hyzon Motors vs. Mullen Automotive | Hyzon Motors vs. Canoo Inc | Hyzon Motors vs. Faraday Future Intelligent | Hyzon Motors vs. Polestar Automotive Holding |
| Polestar Automotive vs. Lucid Group | Polestar Automotive vs. Rivian Automotive | Polestar Automotive vs. Canoo Inc | Polestar Automotive vs. Nio Class A |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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