Correlation Between Kandi Technologies and Nio
Can any of the company-specific risk be diversified away by investing in both Kandi Technologies and Nio 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 Kandi Technologies and Nio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kandi Technologies Group and Nio Class A, you can compare the effects of market volatilities on Kandi Technologies and Nio 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 Kandi Technologies with a short position of Nio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kandi Technologies and Nio.
Diversification Opportunities for Kandi Technologies and Nio
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Kandi and Nio is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Kandi Technologies Group and Nio Class A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nio Class A and Kandi Technologies 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 Kandi Technologies Group are associated (or correlated) with Nio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nio Class A has no effect on the direction of Kandi Technologies i.e., Kandi Technologies and Nio go up and down completely randomly.
Pair Corralation between Kandi Technologies and Nio
Given the investment horizon of 90 days Kandi Technologies Group is expected to generate 0.58 times more return on investment than Nio. However, Kandi Technologies Group is 1.71 times less risky than Nio. It trades about 0.01 of its potential returns per unit of risk. Nio Class A is currently generating about -0.06 per unit of risk. If you would invest 254.00 in Kandi Technologies Group on January 19, 2024 and sell it today you would lose (14.00) from holding Kandi Technologies Group or give up 5.51% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kandi Technologies Group vs. Nio Class A
Performance |
| Timeline |
| Kandi Technologies |
| Nio Class A |
Kandi Technologies and Nio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kandi Technologies and Nio
The main advantage of trading using opposite Kandi Technologies and Nio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kandi Technologies position performs unexpectedly, Nio 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 Nio will offset losses from the drop in Nio's long position.| Kandi Technologies vs. Douglas Dynamics | Kandi Technologies vs. Monro Muffler Brake | Kandi Technologies vs. Fox Factory Holding |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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