Two Equities Correlation Analysis
Specify exactly 2 symbols:
NIO
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This model provides you with a quick lookup of cross correlation between two equities. Please specify two instruments to run the correlation.
Diversification Opportunities for Nio and NYSE Composite
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nio and NYSE is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Nio Class A and NYSE Composite in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NYSE Composite and Nio 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 Nio Class A are associated (or correlated) with NYSE Composite. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NYSE Composite has no effect on the direction of Nio i.e., Nio and NYSE Composite go up and down completely randomly.
Pair Corralation between Nio and NYSE Composite
Considering the 90-day investment horizon Nio Class A is expected to generate 7.34 times more return on investment than NYSE Composite. However, Nio is 7.34 times more volatile than NYSE Composite. It trades about 0.11 of its potential returns per unit of risk. NYSE Composite is currently generating about 0.08 per unit of risk. If you would invest 459.00 in Nio Class A on February 10, 2024 and sell it today you would earn a total of 48.00 from holding Nio Class A or generate 10.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nio Class A vs. NYSE Composite
Performance |
| Timeline |
Nio and NYSE Composite Volatility Contrast
Predicted Return Density |
| Returns |
Nio Class A
Pair trading matchups for Nio
NYSE Composite
Pair trading matchups for NYSE Composite
Pair Trading with Nio and NYSE Composite
The main advantage of trading using opposite Nio and NYSE Composite positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nio position performs unexpectedly, NYSE Composite 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 NYSE Composite will offset losses from the drop in NYSE Composite's long position.The idea behind Nio Class A and NYSE Composite 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.| NYSE Composite vs. Cincinnati Financial | NYSE Composite vs. Topbuild Corp | NYSE Composite vs. National Western Life | NYSE Composite vs. Live Ventures |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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