Correlation Between Niu Technologies and IperionX Limited

Can any of the company-specific risk be diversified away by investing in both Niu Technologies and IperionX Limited 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 Niu Technologies and IperionX Limited into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Niu Technologies and IperionX Limited American, you can compare the effects of market volatilities on Niu Technologies and IperionX Limited 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 Niu Technologies with a short position of IperionX Limited. Check out your portfolio center. Please also check ongoing floating volatility patterns of Niu Technologies and IperionX Limited.

Diversification Opportunities for Niu Technologies and IperionX Limited

-0.39

Correlation Coefficient

Niu Technologies  IperionX Limited

Very good diversification

The 3 months correlation between Niu and IperionX is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Niu Technologies and IperionX Limited American in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IperionX Limited American and Niu 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 Niu Technologies are associated (or correlated) with IperionX Limited. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IperionX Limited American has no effect on the direction of Niu Technologies i.e., Niu Technologies and IperionX Limited go up and down completely randomly.

Pair Corralation between Niu Technologies and IperionX Limited

Considering the 90-day investment horizon Niu Technologies is expected to under-perform the IperionX Limited. In addition to that, Niu Technologies is 1.29 times more volatile than IperionX Limited American. It trades about -0.15 of its total potential returns per unit of risk. IperionX Limited American is currently generating about 0.2 per unit of volatility. If you would invest  1,388  in IperionX Limited American on March 8, 2024 and sell it today you would earn a total of  188.00  from holding IperionX Limited American or generate 13.54% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Niu Technologies  vs.  IperionX Limited American

Niu Technologies

Risk-Adjusted Performance

5 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Niu Technologies are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively abnormal forward indicators, Niu Technologies unveiled solid returns over the last few months and may actually be approaching a breakup point.

IperionX Limited American

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in IperionX Limited American are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, IperionX Limited may actually be approaching a critical reversion point that can send shares even higher in July 2024.

Pair Trading with Niu Technologies and IperionX Limited

The main advantage of trading using opposite Niu Technologies and IperionX Limited positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Niu Technologies position performs unexpectedly, IperionX Limited 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 IperionX Limited will offset losses from the drop in IperionX Limited's long position.

The idea behind Niu Technologies and IperionX Limited American 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.