Correlation Between Blue Bird and Nio
Can any of the company-specific risk be diversified away by investing in both Blue Bird and Nio 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 Blue Bird and Nio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Blue Bird Corp and Nio Class A, you can compare the effects of market volatilities on Blue Bird and Nio 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 Blue Bird with a short position of Nio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blue Bird and Nio.
Diversification Opportunities for Blue Bird and Nio
Pay attention - limited upside
The 3 months correlation between Blue and Nio is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Blue Bird Corp and Nio Class A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nio Class A and Blue Bird 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 Blue Bird Corp are associated (or correlated) with Nio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nio Class A has no effect on the direction of Blue Bird i.e., Blue Bird and Nio go up and down completely randomly.
Pair Corralation between Blue Bird and Nio
Given the investment horizon of 90 days Blue Bird Corp is expected to under-perform the Nio. But the stock apears to be less risky and, when comparing its historical volatility, Blue Bird Corp is 1.55 times less risky than Nio. The stock trades about -0.17 of its potential returns per unit of risk. The Nio Class A is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 467.00 in Nio Class A on January 27, 2024 and sell it today you would lose (18.00) from holding Nio Class A or give up 3.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Blue Bird Corp vs. Nio Class A
Performance |
| Timeline |
| Blue Bird Corp |
| Nio Class A |
Blue Bird and Nio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blue Bird and Nio
The main advantage of trading using opposite Blue Bird and Nio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blue Bird position performs unexpectedly, Nio 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 Nio will offset losses from the drop in Nio's long position.| Blue Bird vs. Phoenix Motor Common | Blue Bird vs. Envirotech Vehicles | Blue Bird vs. Volcon Inc | Blue Bird vs. Zapp Electric Vehicles |
| Nio vs. Pfizer Inc | Nio vs. Hertz Global Holdings | Nio vs. EASTMAN CHEM 45 | Nio vs. Fuller Thaler Behavioral |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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