Correlation Between Nio and Barrett Business

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

Diversification Opportunities for Nio and Barrett Business

0.59

Correlation Coefficient

Nio  Barrett Business

Very weak diversification

The 3 months correlation between Nio and Barrett is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Nio Class A and Barrett Business Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barrett Business Services 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 Barrett Business. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barrett Business Services has no effect on the direction of Nio i.e., Nio and Barrett Business go up and down completely randomly.

Pair Corralation between Nio and Barrett Business

Considering the 90-day investment horizon Nio Class A is expected to generate 1.64 times more return on investment than Barrett Business. However, Nio is 1.64 times more volatile than Barrett Business Services. It trades about -0.03 of its potential returns per unit of risk. Barrett Business Services is currently generating about -0.19 per unit of risk. If you would invest  572.00  in Nio Class A on September 10, 2025 and sell it today you would lose (62.00) from holding Nio Class A or give up 10.84% of portfolio value over 90 days.

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

Nio Class A  vs.  Barrett Business Services

Nio Class A

Risk-Adjusted Performance

Weakest

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 latest unfluctuating performance, the Stock's forward indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Barrett Business Services

Risk-Adjusted Performance

Weakest

Over the last 90 days Barrett Business Services has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in January 2026. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Nio and Barrett Business

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

The idea behind Nio Class A and Barrett Business Services 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.

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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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.