Correlation Between Nio and Gentera SAB
Can any of the company-specific risk be diversified away by investing in both Nio and Gentera SAB 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 Nio and Gentera SAB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nio Class A and Gentera SAB de, you can compare the effects of market volatilities on Nio and Gentera SAB 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 Nio with a short position of Gentera SAB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nio and Gentera SAB.
Diversification Opportunities for Nio and Gentera SAB
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nio and Gentera is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Nio Class A and Gentera SAB de in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gentera SAB de and Nio 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 Nio Class A are associated (or correlated) with Gentera SAB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gentera SAB de has no effect on the direction of Nio i.e., Nio and Gentera SAB go up and down completely randomly.
Pair Corralation between Nio and Gentera SAB
Considering the 90-day investment horizon Nio Class A is expected to under-perform the Gentera SAB. In addition to that, Nio is 1.47 times more volatile than Gentera SAB de. It trades about -0.01 of its total potential returns per unit of risk. Gentera SAB de is currently generating about 0.21 per unit of volatility. If you would invest 119.00 in Gentera SAB de on August 25, 2024 and sell it today you would earn a total of 17.00 from holding Gentera SAB de or generate 14.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nio Class A vs. Gentera SAB de
Performance |
| Timeline |
| Nio Class A |
| Gentera SAB de |
Nio and Gentera SAB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nio and Gentera SAB
The main advantage of trading using opposite Nio and Gentera SAB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nio position performs unexpectedly, Gentera SAB 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 Gentera SAB will offset losses from the drop in Gentera SAB's long position.The idea behind Nio Class A and Gentera SAB de 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.| Gentera SAB vs. Copa Holdings SA | Gentera SAB vs. United Airlines Holdings | Gentera SAB vs. Delta Air Lines | Gentera SAB vs. SkyWest |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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