Correlation Between Nio and Blue Bird
Can any of the company-specific risk be diversified away by investing in both Nio and Blue Bird 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 Nio and Blue Bird into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nio Class A and Blue Bird Corp, you can compare the effects of market volatilities on Nio and Blue Bird 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 Nio with a short position of Blue Bird. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nio and Blue Bird.
Diversification Opportunities for Nio and Blue Bird
Pay attention - limited upside
The 3 months correlation between Nio and Blue is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Nio Class A and Blue Bird Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blue Bird Corp 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 Blue Bird. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blue Bird Corp has no effect on the direction of Nio i.e., Nio and Blue Bird go up and down completely randomly.
Pair Corralation between Nio and Blue Bird
Considering the 90-day investment horizon Nio Class A is expected to under-perform the Blue Bird. In addition to that, Nio is 1.52 times more volatile than Blue Bird Corp. It trades about -0.36 of its total potential returns per unit of risk. Blue Bird Corp is currently generating about -0.13 per unit of volatility. If you would invest 3,625 in Blue Bird Corp on January 21, 2024 and sell it today you would lose (231.00) from holding Blue Bird Corp or give up 6.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nio Class A vs. Blue Bird Corp
Performance |
| Timeline |
| Nio Class A |
| Blue Bird Corp |
Nio and Blue Bird Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nio and Blue Bird
The main advantage of trading using opposite Nio and Blue Bird positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nio position performs unexpectedly, Blue Bird 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 Blue Bird will offset losses from the drop in Blue Bird's long position.The idea behind Nio Class A and Blue Bird 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.| Blue Bird vs. Vicinity Motor Corp | Blue Bird vs. AYRO Inc | Blue Bird vs. Canoo Inc | Blue Bird vs. Hyzon Motors |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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