Correlation Between Gentex and Hyzon Motors

Can any of the company-specific risk be diversified away by investing in both Gentex 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 Gentex and Hyzon Motors into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Gentex and Hyzon Motors, you can compare the effects of market volatilities on Gentex 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 Gentex with a short position of Hyzon Motors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gentex and Hyzon Motors.

Diversification Opportunities for Gentex and Hyzon Motors

-0.43

Correlation Coefficient

Gentex  Hyzon Motors

Very good diversification

The 3 months correlation between Gentex and Hyzon is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Gentex and Hyzon Motors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyzon Motors and Gentex 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 Gentex 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 Gentex i.e., Gentex and Hyzon Motors go up and down completely randomly.

Pair Corralation between Gentex and Hyzon Motors

Given the investment horizon of 90 days Gentex is expected to generate 0.21 times more return on investment than Hyzon Motors. However, Gentex is 4.71 times less risky than Hyzon Motors. It trades about 0.07 of its potential returns per unit of risk. Hyzon Motors is currently generating about -0.02 per unit of risk. If you would invest  2,870  in Gentex on September 14, 2024 and sell it today you would earn a total of  188.00  from holding Gentex or generate 6.55% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Gentex  vs.  Hyzon Motors

Gentex

Risk-Adjusted Performance

5 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Gentex are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, Gentex may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Hyzon Motors

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hyzon Motors has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Gentex and Hyzon Motors

The main advantage of trading using opposite Gentex and Hyzon Motors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gentex 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 Gentex 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.

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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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..