Correlation Between Nikola Corp and KION GROUP
Can any of the company-specific risk be diversified away by investing in both Nikola Corp and KION GROUP 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 KION GROUP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nikola Corp and KION GROUP AG, you can compare the effects of market volatilities on Nikola Corp and KION GROUP 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 KION GROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nikola Corp and KION GROUP.
Diversification Opportunities for Nikola Corp and KION GROUP
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Nikola and KION is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Nikola Corp and KION GROUP AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KION GROUP AG 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 KION GROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KION GROUP AG has no effect on the direction of Nikola Corp i.e., Nikola Corp and KION GROUP go up and down completely randomly.
Pair Corralation between Nikola Corp and KION GROUP
Given the investment horizon of 90 days Nikola Corp is expected to under-perform the KION GROUP. In addition to that, Nikola Corp is 2.85 times more volatile than KION GROUP AG. It trades about -0.43 of its total potential returns per unit of risk. KION GROUP AG is currently generating about -0.05 per unit of volatility. If you would invest 3,760 in KION GROUP AG on September 13, 2024 and sell it today you would lose (130.00) from holding KION GROUP AG or give up 3.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Nikola Corp vs. KION GROUP AG
Performance |
| Timeline |
| Nikola Corp |
| KION GROUP AG |
Nikola Corp and KION GROUP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nikola Corp and KION GROUP
The main advantage of trading using opposite Nikola Corp and KION GROUP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nikola Corp position performs unexpectedly, KION GROUP 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 KION GROUP will offset losses from the drop in KION GROUP'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 |
| KION GROUP vs. Caterpillar | KION GROUP vs. Deere Company | KION GROUP vs. Shyft Group | KION GROUP vs. Nikola Corp |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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