Correlation Between Niu Technologies and Xpeng
Can any of the company-specific risk be diversified away by investing in both Niu Technologies and Xpeng 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 Xpeng into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Niu Technologies and Xpeng Inc, you can compare the effects of market volatilities on Niu Technologies and Xpeng 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 Xpeng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Niu Technologies and Xpeng.
Diversification Opportunities for Niu Technologies and Xpeng
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Niu and Xpeng is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Niu Technologies and Xpeng Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xpeng Inc 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 Xpeng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xpeng Inc has no effect on the direction of Niu Technologies i.e., Niu Technologies and Xpeng go up and down completely randomly.
Pair Corralation between Niu Technologies and Xpeng
Considering the 90-day investment horizon Niu Technologies is expected to under-perform the Xpeng. But the stock apears to be less risky and, when comparing its historical volatility, Niu Technologies is 1.26 times less risky than Xpeng. The stock trades about -0.26 of its potential returns per unit of risk. The Xpeng Inc is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,116 in Xpeng Inc on August 24, 2024 and sell it today you would earn a total of 113.00 from holding Xpeng Inc or generate 10.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Niu Technologies vs. Xpeng Inc
Performance |
| Timeline |
| Niu Technologies |
| Xpeng Inc |
Niu Technologies and Xpeng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Niu Technologies and Xpeng
The main advantage of trading using opposite Niu Technologies and Xpeng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Niu Technologies position performs unexpectedly, Xpeng 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 Xpeng will offset losses from the drop in Xpeng'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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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