Correlation Between Autoliv and Niu Technologies
Can any of the company-specific risk be diversified away by investing in both Autoliv 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 Autoliv and Niu Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Autoliv and Niu Technologies, you can compare the effects of market volatilities on Autoliv 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 Autoliv with a short position of Niu Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Autoliv and Niu Technologies.
Diversification Opportunities for Autoliv and Niu Technologies
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Autoliv and Niu is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Autoliv and Niu Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Niu Technologies and Autoliv 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 Autoliv 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 Autoliv i.e., Autoliv and Niu Technologies go up and down completely randomly.
Pair Corralation between Autoliv and Niu Technologies
Considering the 90-day investment horizon Autoliv is expected to generate 0.39 times more return on investment than Niu Technologies. However, Autoliv is 2.55 times less risky than Niu Technologies. It trades about 0.03 of its potential returns per unit of risk. Niu Technologies is currently generating about -0.02 per unit of risk. If you would invest 8,022 in Autoliv on August 27, 2024 and sell it today you would earn a total of 1,867 from holding Autoliv or generate 23.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Autoliv vs. Niu Technologies
Performance |
| Timeline |
| Autoliv |
| Niu Technologies |
Autoliv and Niu Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Autoliv and Niu Technologies
The main advantage of trading using opposite Autoliv and Niu Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Autoliv 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.The idea behind Autoliv and Niu Technologies 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.| 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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