Correlation Between Westport Fuel and Hesai Group
Can any of the company-specific risk be diversified away by investing in both Westport Fuel and Hesai Group 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 Westport Fuel and Hesai Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Westport Fuel Systems and Hesai Group American, you can compare the effects of market volatilities on Westport Fuel and Hesai Group 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 Westport Fuel with a short position of Hesai Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Westport Fuel and Hesai Group.
Diversification Opportunities for Westport Fuel and Hesai Group
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Westport and Hesai is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Westport Fuel Systems and Hesai Group American in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hesai Group American and Westport Fuel 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 Westport Fuel Systems are associated (or correlated) with Hesai Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hesai Group American has no effect on the direction of Westport Fuel i.e., Westport Fuel and Hesai Group go up and down completely randomly.
Pair Corralation between Westport Fuel and Hesai Group
Given the investment horizon of 90 days Westport Fuel is expected to generate 7.56 times less return on investment than Hesai Group. But when comparing it to its historical volatility, Westport Fuel Systems is 4.88 times less risky than Hesai Group. It trades about 0.14 of its potential returns per unit of risk. Hesai Group American is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 464.00 in Hesai Group American on August 30, 2024 and sell it today you would earn a total of 222.00 from holding Hesai Group American or generate 47.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Westport Fuel Systems vs. Hesai Group American
Performance |
| Timeline |
| Westport Fuel Systems |
| Hesai Group American |
Westport Fuel and Hesai Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Westport Fuel and Hesai Group
The main advantage of trading using opposite Westport Fuel and Hesai Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Westport Fuel position performs unexpectedly, Hesai Group 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 Hesai Group will offset losses from the drop in Hesai Group's long position.| Westport Fuel vs. Foresight Autonomous Holdings | Westport Fuel vs. Hyliion Holdings Corp | Westport Fuel vs. American Axle Manufacturing | Westport Fuel vs. Gentex |
| Hesai Group vs. Lindblad Expeditions Holdings | Hesai Group vs. Merit Medical Systems | Hesai Group vs. United Airlines Holdings | Hesai Group vs. Acco Brands |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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