Correlation Between Nikola Corp and Posera
Can any of the company-specific risk be diversified away by investing in both Nikola Corp and Posera 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 Posera into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nikola Corp and Posera, you can compare the effects of market volatilities on Nikola Corp and Posera 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 Posera. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nikola Corp and Posera.
Diversification Opportunities for Nikola Corp and Posera
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Nikola and Posera is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Nikola Corp and Posera in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Posera 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 Posera. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Posera has no effect on the direction of Nikola Corp i.e., Nikola Corp and Posera go up and down completely randomly.
Pair Corralation between Nikola Corp and Posera
Given the investment horizon of 90 days Nikola Corp is expected to under-perform the Posera. But the stock apears to be less risky and, when comparing its historical volatility, Nikola Corp is 1.21 times less risky than Posera. The stock trades about -0.07 of its potential returns per unit of risk. The Posera is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 9.05 in Posera on September 13, 2024 and sell it today you would lose (6.00) from holding Posera or give up 66.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nikola Corp vs. Posera
Performance |
| Timeline |
| Nikola Corp |
| Posera |
Nikola Corp and Posera Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nikola Corp and Posera
The main advantage of trading using opposite Nikola Corp and Posera positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nikola Corp position performs unexpectedly, Posera 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 Posera will offset losses from the drop in Posera'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 |
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 Stocks Directory module to find actively traded stocks across global markets.
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