Correlation Between Brembo SpA and Hyliion Holdings

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

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

Diversification Opportunities for Brembo SpA and Hyliion Holdings

0.14

Correlation Coefficient

Brembo SpA  Hyliion Holdings

Average diversification

The 3 months correlation between Brembo and Hyliion is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Brembo SpA 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 Brembo SpA 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 Brembo SpA 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 Brembo SpA i.e., Brembo SpA and Hyliion Holdings go up and down completely randomly.

Pair Corralation between Brembo SpA and Hyliion Holdings

Assuming the 90 days horizon Brembo SpA is expected to under-perform the Hyliion Holdings. But the otc stock apears to be less risky and, when comparing its historical volatility, Brembo SpA is 2.0 times less risky than Hyliion Holdings. The otc stock trades about -0.03 of its potential returns per unit of risk. The Hyliion Holdings Corp is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  236.00  in Hyliion Holdings Corp on December 4, 2024 and sell it today you would lose (86.00) from holding Hyliion Holdings Corp or give up 36.44% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	45.55%
Values	Daily Returns

Brembo SpA  vs.  Hyliion Holdings Corp

Brembo SpA

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Brembo SpA are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Brembo SpA reported solid returns over the last few months and may actually be approaching a breakup point.

Hyliion Holdings Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Hyliion Holdings Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's essential indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Brembo SpA and Hyliion Holdings

The main advantage of trading using opposite Brembo SpA and Hyliion Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brembo SpA 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.

The idea behind Brembo SpA and Hyliion Holdings Corp 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.