Correlation Between Hesai Group and Superior Industries

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

By analyzing existing cross correlation between Hesai Group American and Superior Industries International, you can compare the effects of market volatilities on Hesai Group and Superior Industries 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 Hesai Group with a short position of Superior Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hesai Group and Superior Industries.

Diversification Opportunities for Hesai Group and Superior Industries

-0.8

Correlation Coefficient

Hesai Group  Superior Industries

Pay attention - limited upside

The 3 months correlation between Hesai and Superior is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Hesai Group American and Superior Industries Internatio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Superior Industries and Hesai Group 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 Hesai Group American are associated (or correlated) with Superior Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Superior Industries has no effect on the direction of Hesai Group i.e., Hesai Group and Superior Industries go up and down completely randomly.

Pair Corralation between Hesai Group and Superior Industries

Given the investment horizon of 90 days Hesai Group American is expected to generate 3.97 times more return on investment than Superior Industries. However, Hesai Group is 3.97 times more volatile than Superior Industries International. It trades about 0.32 of its potential returns per unit of risk. Superior Industries International is currently generating about -0.25 per unit of risk. If you would invest  686.00  in Hesai Group American on September 27, 2024 and sell it today you would earn a total of  600.00  from holding Hesai Group American or generate 87.46% return on investment over 90 days.

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

Hesai Group American  vs.  Superior Industries Internatio

Hesai Group American

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Hesai Group American are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite fairly conflicting basic indicators, Hesai Group demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Superior Industries

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Superior Industries International has generated negative risk-adjusted returns adding no value to investors with long positions. Even with fragile performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Hesai Group and Superior Industries

The main advantage of trading using opposite Hesai Group and Superior Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hesai Group position performs unexpectedly, Superior Industries 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 Superior Industries will offset losses from the drop in Superior Industries' long position.

The idea behind Hesai Group American and Superior Industries International 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.