Correlation Between Hino Motors and Nikola Corp
Can any of the company-specific risk be diversified away by investing in both Hino Motors and Nikola Corp 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 Hino Motors and Nikola Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hino Motors Ltd and Nikola Corp, you can compare the effects of market volatilities on Hino Motors and Nikola Corp 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 Hino Motors with a short position of Nikola Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hino Motors and Nikola Corp.
Diversification Opportunities for Hino Motors and Nikola Corp
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hino and Nikola is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Hino Motors Ltd and Nikola Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nikola Corp and Hino Motors 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 Hino Motors Ltd are associated (or correlated) with Nikola Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nikola Corp has no effect on the direction of Hino Motors i.e., Hino Motors and Nikola Corp go up and down completely randomly.
Pair Corralation between Hino Motors and Nikola Corp
Assuming the 90 days horizon Hino Motors Ltd is expected to generate 0.18 times more return on investment than Nikola Corp. However, Hino Motors Ltd is 5.62 times less risky than Nikola Corp. It trades about -0.22 of its potential returns per unit of risk. Nikola Corp is currently generating about -0.24 per unit of risk. If you would invest 3,320 in Hino Motors Ltd on November 28, 2024 and sell it today you would lose (550.00) from holding Hino Motors Ltd or give up 16.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Hino Motors Ltd vs. Nikola Corp
Performance |
| Timeline |
| Hino Motors |
| Nikola Corp |
Hino Motors and Nikola Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hino Motors and Nikola Corp
The main advantage of trading using opposite Hino Motors and Nikola Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hino Motors position performs unexpectedly, Nikola Corp 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 Nikola Corp will offset losses from the drop in Nikola Corp's long position.| Hino Motors vs. Daimler Truck Holding | Hino Motors vs. Volvo AB ADR | Hino Motors vs. Columbus McKinnon | Hino Motors vs. Hyster Yale Materials Handling |
| Nikola Corp vs. Xos Inc | Nikola Corp vs. Hydrofarm Holdings Group | Nikola Corp vs. Caterpillar | Nikola Corp vs. AGCO Corporation |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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