Correlation Between Nio and Niu Technologies
Can any of the company-specific risk be diversified away by investing in both Nio and Niu Technologies 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 Niu Technologies 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 Niu Technologies, you can compare the effects of market volatilities on Nio and Niu Technologies 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 Niu Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nio and Niu Technologies.
Diversification Opportunities for Nio and Niu Technologies
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nio and Niu is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Nio Class A and Niu Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Niu Technologies 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 Niu Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Niu Technologies has no effect on the direction of Nio i.e., Nio and Niu Technologies go up and down completely randomly.
Pair Corralation between Nio and Niu Technologies
Considering the 90-day investment horizon Nio Class A is expected to under-perform the Niu Technologies. But the stock apears to be less risky and, when comparing its historical volatility, Nio Class A is 2.18 times less risky than Niu Technologies. The stock trades about -0.16 of its potential returns per unit of risk. The Niu Technologies is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 170.00 in Niu Technologies on January 26, 2024 and sell it today you would earn a total of 38.00 from holding Niu Technologies or generate 22.35% 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. Niu Technologies
Performance |
| Timeline |
| Nio Class A |
| Niu Technologies |
Nio and Niu Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nio and Niu Technologies
The main advantage of trading using opposite Nio and Niu Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nio position performs unexpectedly, Niu Technologies 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 Niu Technologies will offset losses from the drop in Niu Technologies' long position.| Nio vs. Hycroft Mining Holding | Nio vs. Imperial Petroleum | Nio vs. Exela Technologies | Nio vs. Camber Energy |
| Niu Technologies vs. Xpeng Inc | Niu Technologies vs. Nio Class A | Niu Technologies vs. Lucid Group | Niu Technologies vs. BYD Co Ltd |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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