Correlation Between Canoo and Hyliion Holdings

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

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

Diversification Opportunities for Canoo and Hyliion Holdings

0.86

Correlation Coefficient

Canoo  Hyliion Holdings

Very poor diversification

The 3 months correlation between Canoo and Hyliion is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Canoo Inc 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 Canoo 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 Canoo Inc 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 Canoo i.e., Canoo and Hyliion Holdings go up and down completely randomly.

Pair Corralation between Canoo and Hyliion Holdings

Given the investment horizon of 90 days Canoo Inc is expected to under-perform the Hyliion Holdings. In addition to that, Canoo is 5.54 times more volatile than Hyliion Holdings Corp. It trades about -0.19 of its total potential returns per unit of risk. Hyliion Holdings Corp is currently generating about -0.21 per unit of volatility. If you would invest  269.00  in Hyliion Holdings Corp on December 28, 2024 and sell it today you would lose (124.00) from holding Hyliion Holdings Corp or give up 46.1% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	37.7%
Values	Daily Returns

Canoo Inc  vs.  Hyliion Holdings Corp

Canoo Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Canoo Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's technical and fundamental indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

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 Canoo and Hyliion Holdings

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

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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.