Correlation Between Nikola Corp and Gencor Industries
Can any of the company-specific risk be diversified away by investing in both Nikola Corp and Gencor Industries 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 Gencor Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nikola Corp and Gencor Industries, you can compare the effects of market volatilities on Nikola Corp and Gencor Industries 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 Gencor Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nikola Corp and Gencor Industries.
Diversification Opportunities for Nikola Corp and Gencor Industries
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Nikola and Gencor is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Nikola Corp and Gencor Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gencor Industries 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 Gencor Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gencor Industries has no effect on the direction of Nikola Corp i.e., Nikola Corp and Gencor Industries go up and down completely randomly.
Pair Corralation between Nikola Corp and Gencor Industries
Given the investment horizon of 90 days Nikola Corp is expected to under-perform the Gencor Industries. In addition to that, Nikola Corp is 3.33 times more volatile than Gencor Industries. It trades about -0.06 of its total potential returns per unit of risk. Gencor Industries is currently generating about 0.08 per unit of volatility. If you would invest 1,056 in Gencor Industries on August 28, 2024 and sell it today you would earn a total of 1,186 from holding Gencor Industries or generate 112.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nikola Corp vs. Gencor Industries
Performance |
| Timeline |
| Nikola Corp |
| Gencor Industries |
Nikola Corp and Gencor Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nikola Corp and Gencor Industries
The main advantage of trading using opposite Nikola Corp and Gencor Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nikola Corp position performs unexpectedly, Gencor Industries 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 Gencor Industries will offset losses from the drop in Gencor Industries' long position.| Nikola Corp vs. Lion Electric Corp | Nikola Corp vs. Xos Inc | Nikola Corp vs. Hydrofarm Holdings Group | Nikola Corp vs. Caterpillar |
| Gencor Industries vs. Alamo Group | Gencor Industries vs. Manitowoc | Gencor Industries vs. Manitex International | Gencor Industries vs. Columbus McKinnon |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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