Correlation Between American Premium and Nikola Corp
Can any of the company-specific risk be diversified away by investing in both American Premium 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 American Premium and Nikola Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Premium Water and Nikola Corp, you can compare the effects of market volatilities on American Premium 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 American Premium with a short position of Nikola Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Premium and Nikola Corp.
Diversification Opportunities for American Premium and Nikola Corp
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between American and Nikola is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding American Premium Water and Nikola Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nikola Corp and American Premium 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 American Premium Water 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 American Premium i.e., American Premium and Nikola Corp go up and down completely randomly.
Pair Corralation between American Premium and Nikola Corp
Given the investment horizon of 90 days American Premium Water is expected to generate 41.36 times more return on investment than Nikola Corp. However, American Premium is 41.36 times more volatile than Nikola Corp. It trades about 0.27 of its potential returns per unit of risk. Nikola Corp is currently generating about -0.16 per unit of risk. If you would invest 0.00 in American Premium Water on November 3, 2024 and sell it today you would earn a total of 0.00 from holding American Premium Water or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 88.31% |
| Values | Daily Returns |
American Premium Water vs. Nikola Corp
Performance |
| Timeline |
| American Premium Water |
| Nikola Corp |
American Premium and Nikola Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Premium and Nikola Corp
The main advantage of trading using opposite American Premium and Nikola Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Premium 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.| American Premium vs. First Tractor | American Premium vs. Ag Growth International | American Premium vs. AmeraMex International | American Premium vs. Arts Way Manufacturing Co |
| 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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