Correlation Between NFI and Zapp Electric
Can any of the company-specific risk be diversified away by investing in both NFI and Zapp Electric 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 NFI and Zapp Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NFI Group and Zapp Electric Vehicles, you can compare the effects of market volatilities on NFI and Zapp Electric 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 NFI with a short position of Zapp Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of NFI and Zapp Electric.
Diversification Opportunities for NFI and Zapp Electric
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NFI and Zapp is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding NFI Group and Zapp Electric Vehicles in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zapp Electric Vehicles and NFI 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 NFI Group are associated (or correlated) with Zapp Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zapp Electric Vehicles has no effect on the direction of NFI i.e., NFI and Zapp Electric go up and down completely randomly.
Pair Corralation between NFI and Zapp Electric
Assuming the 90 days horizon NFI Group is expected to under-perform the Zapp Electric. But the pink sheet apears to be less risky and, when comparing its historical volatility, NFI Group is 3.81 times less risky than Zapp Electric. The pink sheet trades about -0.31 of its potential returns per unit of risk. The Zapp Electric Vehicles is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 0.97 in Zapp Electric Vehicles on August 24, 2024 and sell it today you would lose (0.02) from holding Zapp Electric Vehicles or give up 2.06% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NFI Group vs. Zapp Electric Vehicles
Performance |
| Timeline |
| NFI Group |
| Zapp Electric Vehicles |
NFI and Zapp Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NFI and Zapp Electric
The main advantage of trading using opposite NFI and Zapp Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NFI position performs unexpectedly, Zapp Electric 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 Zapp Electric will offset losses from the drop in Zapp Electric's long position.| NFI vs. Zapp Electric Vehicles | NFI vs. Guangzhou Automobile Group | NFI vs. Exor NV | NFI vs. Aston Martin Lagonda |
| Zapp Electric vs. Ford Motor | Zapp Electric vs. Ford Motor | Zapp Electric vs. F PD | Zapp Electric vs. Lotus Technology American |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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