Correlation Between Emeren and Hyliion Holdings
Can any of the company-specific risk be diversified away by investing in both Emeren 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 Emeren and Hyliion Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Emeren Group and Hyliion Holdings Corp, you can compare the effects of market volatilities on Emeren 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 Emeren with a short position of Hyliion Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Emeren and Hyliion Holdings.
Diversification Opportunities for Emeren and Hyliion Holdings
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Emeren and Hyliion is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Emeren Group 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 Emeren 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 Emeren Group 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 Emeren i.e., Emeren and Hyliion Holdings go up and down completely randomly.
Pair Corralation between Emeren and Hyliion Holdings
Considering the 90-day investment horizon Emeren Group is expected to under-perform the Hyliion Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Emeren Group is 1.27 times less risky than Hyliion Holdings. The stock trades about -0.05 of its potential returns per unit of risk. The Hyliion Holdings Corp is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 194.00 in Hyliion Holdings Corp on September 12, 2024 and sell it today you would earn a total of 109.50 from holding Hyliion Holdings Corp or generate 56.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Emeren Group vs. Hyliion Holdings Corp
Performance |
| Timeline |
| Emeren Group |
| Hyliion Holdings Corp |
Emeren and Hyliion Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Emeren and Hyliion Holdings
The main advantage of trading using opposite Emeren and Hyliion Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Emeren 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.| Emeren vs. Canadian Solar | Emeren vs. Maxeon Solar Technologies | Emeren vs. SolarEdge Technologies | Emeren vs. Sunnova Energy International |
| 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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