Correlation Between Nikola Corp and Lindsay
Can any of the company-specific risk be diversified away by investing in both Nikola Corp and Lindsay 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 Lindsay into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nikola Corp and Lindsay, you can compare the effects of market volatilities on Nikola Corp and Lindsay 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 Lindsay. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nikola Corp and Lindsay.
Diversification Opportunities for Nikola Corp and Lindsay
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nikola and Lindsay is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Nikola Corp and Lindsay in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lindsay 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 Lindsay. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lindsay has no effect on the direction of Nikola Corp i.e., Nikola Corp and Lindsay go up and down completely randomly.
Pair Corralation between Nikola Corp and Lindsay
Given the investment horizon of 90 days Nikola Corp is expected to generate 6.19 times more return on investment than Lindsay. However, Nikola Corp is 6.19 times more volatile than Lindsay. It trades about 0.13 of its potential returns per unit of risk. Lindsay is currently generating about 0.36 per unit of risk. If you would invest 116.00 in Nikola Corp on October 23, 2024 and sell it today you would earn a total of 18.00 from holding Nikola Corp or generate 15.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nikola Corp vs. Lindsay
Performance |
| Timeline |
| Nikola Corp |
| Lindsay |
Nikola Corp and Lindsay Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nikola Corp and Lindsay
The main advantage of trading using opposite Nikola Corp and Lindsay positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nikola Corp position performs unexpectedly, Lindsay 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 Lindsay will offset losses from the drop in Lindsay's long position.| Nikola Corp vs. Xos Inc | Nikola Corp vs. Hydrofarm Holdings Group | Nikola Corp vs. Caterpillar | Nikola Corp vs. AGCO Corporation |
| Lindsay vs. Columbus McKinnon | Lindsay vs. Astec Industries | Lindsay vs. Shyft Group | Lindsay vs. AGCO Corporation |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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