Correlation Between Stoneridge and Hyzon Motors
Can any of the company-specific risk be diversified away by investing in both Stoneridge and Hyzon Motors 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 Stoneridge and Hyzon Motors into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stoneridge and Hyzon Motors, you can compare the effects of market volatilities on Stoneridge and Hyzon Motors 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 Stoneridge with a short position of Hyzon Motors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stoneridge and Hyzon Motors.
Diversification Opportunities for Stoneridge and Hyzon Motors
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Stoneridge and Hyzon is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Stoneridge and Hyzon Motors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyzon Motors and Stoneridge 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 Stoneridge are associated (or correlated) with Hyzon Motors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyzon Motors has no effect on the direction of Stoneridge i.e., Stoneridge and Hyzon Motors go up and down completely randomly.
Pair Corralation between Stoneridge and Hyzon Motors
Considering the 90-day investment horizon Stoneridge is expected to under-perform the Hyzon Motors. But the stock apears to be less risky and, when comparing its historical volatility, Stoneridge is 1.47 times less risky than Hyzon Motors. The stock trades about -0.22 of its potential returns per unit of risk. The Hyzon Motors is currently generating about -0.11 of returns per unit of risk over similar time horizon. If you would invest 261.00 in Hyzon Motors on August 28, 2024 and sell it today you would lose (93.00) from holding Hyzon Motors or give up 35.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stoneridge vs. Hyzon Motors
Performance |
| Timeline |
| Stoneridge |
| Hyzon Motors |
Stoneridge and Hyzon Motors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stoneridge and Hyzon Motors
The main advantage of trading using opposite Stoneridge and Hyzon Motors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stoneridge position performs unexpectedly, Hyzon Motors 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 Hyzon Motors will offset losses from the drop in Hyzon Motors' long position.The idea behind Stoneridge and Hyzon Motors pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Hyzon Motors vs. Mullen Automotive | Hyzon Motors vs. Canoo Inc | Hyzon Motors vs. Faraday Future Intelligent | Hyzon Motors vs. Polestar Automotive Holding |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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