Correlation Between Nikola Corp and AGCO
Can any of the company-specific risk be diversified away by investing in both Nikola Corp and AGCO 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 AGCO into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nikola Corp and AGCO Corporation, you can compare the effects of market volatilities on Nikola Corp and AGCO 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 AGCO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nikola Corp and AGCO.
Diversification Opportunities for Nikola Corp and AGCO
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nikola and AGCO is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Nikola Corp and AGCO Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AGCO 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 AGCO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AGCO has no effect on the direction of Nikola Corp i.e., Nikola Corp and AGCO go up and down completely randomly.
Pair Corralation between Nikola Corp and AGCO
Given the investment horizon of 90 days Nikola Corp is expected to under-perform the AGCO. In addition to that, Nikola Corp is 2.58 times more volatile than AGCO Corporation. It trades about -0.59 of its total potential returns per unit of risk. AGCO Corporation is currently generating about -0.04 per unit of volatility. If you would invest 10,157 in AGCO Corporation on August 27, 2024 and sell it today you would lose (314.00) from holding AGCO Corporation or give up 3.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nikola Corp vs. AGCO Corp.
Performance |
| Timeline |
| Nikola Corp |
| AGCO |
Nikola Corp and AGCO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nikola Corp and AGCO
The main advantage of trading using opposite Nikola Corp and AGCO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nikola Corp position performs unexpectedly, AGCO 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 AGCO will offset losses from the drop in AGCO's long position.| Nikola Corp vs. Lion Electric Corp | Nikola Corp vs. Xos Inc | Nikola Corp vs. Hydrofarm Holdings Group | Nikola Corp vs. Caterpillar |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
Other Complementary Tools
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine |