Correlation Between Hyliion Holdings and Holley

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Can any of the company-specific risk be diversified away by investing in both Hyliion Holdings and Holley 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 Hyliion Holdings and Holley into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hyliion Holdings Corp and Holley Inc, you can compare the effects of market volatilities on Hyliion Holdings and Holley 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 Hyliion Holdings with a short position of Holley. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyliion Holdings and Holley.

Diversification Opportunities for Hyliion Holdings and Holley

HyliionHolleyDiversified AwayHyliionHolleyDiversified Away100%
-0.29
  Correlation Coefficient

Very good diversification

The 3 months correlation between Hyliion and Holley is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Hyliion Holdings Corp and Holley Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Holley Inc and Hyliion Holdings 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 Hyliion Holdings Corp are associated (or correlated) with Holley. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Holley Inc has no effect on the direction of Hyliion Holdings i.e., Hyliion Holdings and Holley go up and down completely randomly.

Pair Corralation between Hyliion Holdings and Holley

Given the investment horizon of 90 days Hyliion Holdings Corp is expected to generate 2.23 times more return on investment than Holley. However, Hyliion Holdings is 2.23 times more volatile than Holley Inc. It trades about 0.12 of its potential returns per unit of risk. Holley Inc is currently generating about -0.1 per unit of risk. If you would invest  216.00  in Hyliion Holdings Corp on September 15, 2024 and sell it today you would earn a total of  84.00  from holding Hyliion Holdings Corp or generate 38.89% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Hyliion Holdings Corp  vs.  Holley Inc

 Performance 
JavaScript chart by amCharts 3.21.15OctNov -20020406080100
JavaScript chart by amCharts 3.21.15HYLN HLLY
       Timeline  
Hyliion Holdings Corp 

Risk-Adjusted Performance

9 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Hyliion Holdings Corp are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain essential indicators, Hyliion Holdings displayed solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec2.533.54
Holley Inc 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Holley Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's essential indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec2.42.62.833.23.4

Hyliion Holdings and Holley Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-17.69-13.25-8.81-4.37-0.0744.539.314.0718.8423.61 0.010.020.030.040.05
JavaScript chart by amCharts 3.21.15HYLN HLLY
       Returns  

Pair Trading with Hyliion Holdings and Holley

The main advantage of trading using opposite Hyliion Holdings and Holley positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyliion Holdings position performs unexpectedly, Holley 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 Holley will offset losses from the drop in Holley's long position.
The idea behind Hyliion Holdings Corp and Holley Inc 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 Global Correlations module to find global opportunities by holding instruments from different markets.

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