Correlation Between Nio and Fair Isaac

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Can any of the company-specific risk be diversified away by investing in both Nio and Fair Isaac 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 Fair Isaac 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 Fair Isaac, you can compare the effects of market volatilities on Nio and Fair Isaac 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 Fair Isaac. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nio and Fair Isaac.

Diversification Opportunities for Nio and Fair Isaac

-0.73
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Nio and Fair is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Nio Class A and Fair Isaac in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fair Isaac 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 Fair Isaac. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fair Isaac has no effect on the direction of Nio i.e., Nio and Fair Isaac go up and down completely randomly.

Pair Corralation between Nio and Fair Isaac

Considering the 90-day investment horizon Nio Class A is expected to under-perform the Fair Isaac. In addition to that, Nio is 1.96 times more volatile than Fair Isaac. It trades about -0.03 of its total potential returns per unit of risk. Fair Isaac is currently generating about 0.13 per unit of volatility. If you would invest  34,144  in Fair Isaac on December 30, 2023 and sell it today you would earn a total of  90,817  from holding Fair Isaac or generate 265.98% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Nio Class A  vs.  Fair Isaac

 Performance 
       Timeline  
Nio Class A 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Nio Class A has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's forward indicators remain very healthy which may send shares a bit higher in April 2024. The recent disarray may also be a sign of long period up-swing for the firm investors.
Fair Isaac 

Risk-Adjusted Performance

6 of 100

 
Low
 
High
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Fair Isaac are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal fundamental indicators, Fair Isaac may actually be approaching a critical reversion point that can send shares even higher in April 2024.

Nio and Fair Isaac Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Nio and Fair Isaac

The main advantage of trading using opposite Nio and Fair Isaac positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nio position performs unexpectedly, Fair Isaac 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 Fair Isaac will offset losses from the drop in Fair Isaac's long position.
The idea behind Nio Class A and Fair Isaac 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.
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.

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