Correlation Between ECARX Holdings and Niu Technologies
Can any of the company-specific risk be diversified away by investing in both ECARX Holdings 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 ECARX Holdings and Niu Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ECARX Holdings Class and Niu Technologies, you can compare the effects of market volatilities on ECARX Holdings 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 ECARX Holdings with a short position of Niu Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of ECARX Holdings and Niu Technologies.
Diversification Opportunities for ECARX Holdings and Niu Technologies
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ECARX and Niu is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding ECARX Holdings Class and Niu Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Niu Technologies and ECARX Holdings 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 ECARX Holdings Class 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 ECARX Holdings i.e., ECARX Holdings and Niu Technologies go up and down completely randomly.
Pair Corralation between ECARX Holdings and Niu Technologies
Considering the 90-day investment horizon ECARX Holdings Class is expected to under-perform the Niu Technologies. In addition to that, ECARX Holdings is 1.6 times more volatile than Niu Technologies. It trades about -0.02 of its total potential returns per unit of risk. Niu Technologies is currently generating about -0.02 per unit of volatility. If you would invest 505.00 in Niu Technologies on August 27, 2024 and sell it today you would lose (320.00) from holding Niu Technologies or give up 63.37% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
ECARX Holdings Class vs. Niu Technologies
Performance |
Timeline |
ECARX Holdings Class |
Niu Technologies |
ECARX Holdings and Niu Technologies Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with ECARX Holdings and Niu Technologies
The main advantage of trading using opposite ECARX Holdings and Niu Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ECARX Holdings 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.ECARX Holdings vs. Dorman Products | ECARX Holdings vs. Monro Muffler Brake | ECARX Holdings vs. Standard Motor Products | ECARX Holdings vs. Stoneridge |
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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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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