Correlation Between Niu Technologies and Nio
Can any of the company-specific risk be diversified away by investing in both Niu Technologies 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 Niu Technologies and Nio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Niu Technologies and Nio Class A, you can compare the effects of market volatilities on Niu Technologies 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 Niu Technologies with a short position of Nio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Niu Technologies and Nio.
Diversification Opportunities for Niu Technologies and Nio
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Niu and Nio is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Niu Technologies 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 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 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 Niu Technologies i.e., Niu Technologies and Nio go up and down completely randomly.
Pair Corralation between Niu Technologies and Nio
Considering the 90-day investment horizon Niu Technologies is expected to generate 1.25 times more return on investment than Nio. However, Niu Technologies is 1.25 times more volatile than Nio Class A. It trades about 0.03 of its potential returns per unit of risk. Nio Class A is currently generating about -0.1 per unit of risk. If you would invest 203.00 in Niu Technologies on January 26, 2024 and sell it today you would earn a total of 5.00 from holding Niu Technologies or generate 2.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Niu Technologies vs. Nio Class A
Performance |
| Timeline |
| Niu Technologies |
| Nio Class A |
Niu Technologies and Nio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Niu Technologies and Nio
The main advantage of trading using opposite Niu Technologies and Nio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Niu Technologies 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.| Niu Technologies vs. Ford Motor | Niu Technologies vs. General Motors | Niu Technologies vs. Goodyear Tire Rubber | Niu Technologies vs. Li AutoInc |
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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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