Correlation Between Freightcar America and Hyliion Holdings
Can any of the company-specific risk be diversified away by investing in both Freightcar America and Hyliion Holdings 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 Freightcar America and Hyliion Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Freightcar America and Hyliion Holdings Corp, you can compare the effects of market volatilities on Freightcar America and Hyliion Holdings 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 Freightcar America with a short position of Hyliion Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Freightcar America and Hyliion Holdings.
Diversification Opportunities for Freightcar America and Hyliion Holdings
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Freightcar and Hyliion is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Freightcar America and Hyliion Holdings Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyliion Holdings Corp and Freightcar America 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 Freightcar America are associated (or correlated) with Hyliion Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyliion Holdings Corp has no effect on the direction of Freightcar America i.e., Freightcar America and Hyliion Holdings go up and down completely randomly.
Pair Corralation between Freightcar America and Hyliion Holdings
Given the investment horizon of 90 days Freightcar America is expected to generate 1.0 times more return on investment than Hyliion Holdings. However, Freightcar America is 1.0 times more volatile than Hyliion Holdings Corp. It trades about 0.48 of its potential returns per unit of risk. Hyliion Holdings Corp is currently generating about -0.09 per unit of risk. If you would invest 888.00 in Freightcar America on October 23, 2024 and sell it today you would earn a total of 345.00 from holding Freightcar America or generate 38.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Freightcar America vs. Hyliion Holdings Corp
Performance |
| Timeline |
| Freightcar America |
| Hyliion Holdings Corp |
Freightcar America and Hyliion Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Freightcar America and Hyliion Holdings
The main advantage of trading using opposite Freightcar America and Hyliion Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Freightcar America position performs unexpectedly, Hyliion Holdings 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 Hyliion Holdings will offset losses from the drop in Hyliion Holdings' long position.| Freightcar America vs. Greenbrier Companies | Freightcar America vs. LB Foster | Freightcar America vs. Westinghouse Air Brake | Freightcar America vs. CSX Corporation |
| 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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