Correlation Between Westport Fuel and Hyliion Holdings
Can any of the company-specific risk be diversified away by investing in both Westport Fuel 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 Westport Fuel and Hyliion Holdings 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 Hyliion Holdings Corp, you can compare the effects of market volatilities on Westport Fuel 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 Westport Fuel with a short position of Hyliion Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Westport Fuel and Hyliion Holdings.
Diversification Opportunities for Westport Fuel and Hyliion Holdings
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Westport and Hyliion is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Westport Fuel Systems 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 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 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 Westport Fuel i.e., Westport Fuel and Hyliion Holdings go up and down completely randomly.
Pair Corralation between Westport Fuel and Hyliion Holdings
Given the investment horizon of 90 days Westport Fuel Systems is expected to under-perform the Hyliion Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Westport Fuel Systems is 1.49 times less risky than Hyliion Holdings. The stock trades about -0.02 of its potential returns per unit of risk. The Hyliion Holdings Corp is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 304.00 in Hyliion Holdings Corp on August 23, 2024 and sell it today you would lose (13.00) from holding Hyliion Holdings Corp or give up 4.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Westport Fuel Systems vs. Hyliion Holdings Corp
Performance |
| Timeline |
| Westport Fuel Systems |
| Hyliion Holdings Corp |
Westport Fuel and Hyliion Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Westport Fuel and Hyliion Holdings
The main advantage of trading using opposite Westport Fuel and Hyliion Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Westport Fuel 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.| Westport Fuel vs. Foresight Autonomous Holdings | Westport Fuel vs. Hyliion Holdings Corp | Westport Fuel vs. American Axle Manufacturing | Westport Fuel vs. Gentex |
| 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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