Correlation Between Zapp Electric and Hesai Group
Can any of the company-specific risk be diversified away by investing in both Zapp Electric 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 Zapp Electric and Hesai Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Zapp Electric Vehicles and Hesai Group American, you can compare the effects of market volatilities on Zapp Electric 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 Zapp Electric with a short position of Hesai Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zapp Electric and Hesai Group.
Diversification Opportunities for Zapp Electric and Hesai Group
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Zapp and Hesai is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Zapp Electric Vehicles 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 Zapp Electric 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 Zapp Electric Vehicles 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 Zapp Electric i.e., Zapp Electric and Hesai Group go up and down completely randomly.
Pair Corralation between Zapp Electric and Hesai Group
Given the investment horizon of 90 days Zapp Electric Vehicles is expected to under-perform the Hesai Group. In addition to that, Zapp Electric is 1.02 times more volatile than Hesai Group American. It trades about -0.36 of its total potential returns per unit of risk. Hesai Group American is currently generating about -0.03 per unit of volatility. If you would invest 480.00 in Hesai Group American on August 23, 2024 and sell it today you would lose (19.00) from holding Hesai Group American or give up 3.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zapp Electric Vehicles vs. Hesai Group American
Performance |
| Timeline |
| Zapp Electric Vehicles |
| Hesai Group American |
Zapp Electric and Hesai Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zapp Electric and Hesai Group
The main advantage of trading using opposite Zapp Electric and Hesai Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zapp Electric 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.| Zapp Electric vs. Ryman Hospitality Properties | Zapp Electric vs. Life Time Group | Zapp Electric vs. Brunswick | Zapp Electric vs. Planet Fitness |
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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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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