Correlation Between Nikola Corp and AB International
Can any of the company-specific risk be diversified away by investing in both Nikola Corp and AB International 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 Nikola Corp and AB International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nikola Corp and AB International Group, you can compare the effects of market volatilities on Nikola Corp and AB International 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 Nikola Corp with a short position of AB International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nikola Corp and AB International.
Diversification Opportunities for Nikola Corp and AB International
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Nikola and ABQQ is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Nikola Corp and AB International Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AB International and Nikola Corp 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 Nikola Corp are associated (or correlated) with AB International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AB International has no effect on the direction of Nikola Corp i.e., Nikola Corp and AB International go up and down completely randomly.
Pair Corralation between Nikola Corp and AB International
Given the investment horizon of 90 days Nikola Corp is expected to under-perform the AB International. But the stock apears to be less risky and, when comparing its historical volatility, Nikola Corp is 2.29 times less risky than AB International. The stock trades about -0.36 of its potential returns per unit of risk. The AB International Group is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 0.07 in AB International Group on September 13, 2024 and sell it today you would earn a total of 0.03 from holding AB International Group or generate 42.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Nikola Corp vs. AB International Group
Performance |
| Timeline |
| Nikola Corp |
| AB International |
Nikola Corp and AB International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nikola Corp and AB International
The main advantage of trading using opposite Nikola Corp and AB International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nikola Corp position performs unexpectedly, AB International 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 AB International will offset losses from the drop in AB International's long position.| Nikola Corp vs. Aquagold International | Nikola Corp vs. Thrivent High Yield | Nikola Corp vs. Morningstar Unconstrained Allocation | Nikola Corp vs. Via Renewables |
| AB International vs. Peer To Peer | AB International vs. AppYea Inc | AB International vs. Image Protect | AB International vs. Bowmo Inc |
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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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