Correlation Between Niu Technologies and Autoliv
Can any of the company-specific risk be diversified away by investing in both Niu Technologies and Autoliv 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 Niu Technologies and Autoliv into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Niu Technologies and Autoliv, you can compare the effects of market volatilities on Niu Technologies and Autoliv 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 Niu Technologies with a short position of Autoliv. Check out your portfolio center. Please also check ongoing floating volatility patterns of Niu Technologies and Autoliv.
Diversification Opportunities for Niu Technologies and Autoliv
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Niu and Autoliv is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Niu Technologies and Autoliv in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Autoliv and Niu Technologies 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 Niu Technologies are associated (or correlated) with Autoliv. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Autoliv has no effect on the direction of Niu Technologies i.e., Niu Technologies and Autoliv go up and down completely randomly.
Pair Corralation between Niu Technologies and Autoliv
Considering the 90-day investment horizon Niu Technologies is expected to under-perform the Autoliv. In addition to that, Niu Technologies is 2.58 times more volatile than Autoliv. It trades about -0.02 of its total potential returns per unit of risk. Autoliv is currently generating about 0.03 per unit of volatility. If you would invest 8,017 in Autoliv on August 24, 2024 and sell it today you would earn a total of 1,763 from holding Autoliv or generate 21.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Niu Technologies vs. Autoliv
Performance |
| Timeline |
| Niu Technologies |
| Autoliv |
Niu Technologies and Autoliv Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Niu Technologies and Autoliv
The main advantage of trading using opposite Niu Technologies and Autoliv positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Niu Technologies position performs unexpectedly, Autoliv 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 Autoliv will offset losses from the drop in Autoliv's long position.| Niu Technologies vs. Xpeng Inc | Niu Technologies vs. Nio Class A | Niu Technologies vs. Lucid Group | Niu Technologies vs. BYD Co Ltd |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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