Correlation Between Phoenix and Nio
Can any of the company-specific risk be diversified away by investing in both Phoenix and Nio 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 Phoenix and Nio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Phoenix Motor Common and Nio Class A, you can compare the effects of market volatilities on Phoenix and Nio 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 Phoenix with a short position of Nio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Phoenix and Nio.
Diversification Opportunities for Phoenix and Nio
Very poor diversification
The 3 months correlation between Phoenix and Nio is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Phoenix Motor Common and Nio Class A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nio Class A and Phoenix 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 Phoenix Motor Common are associated (or correlated) with Nio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nio Class A has no effect on the direction of Phoenix i.e., Phoenix and Nio go up and down completely randomly.
Pair Corralation between Phoenix and Nio
Considering the 90-day investment horizon Phoenix Motor Common is expected to under-perform the Nio. In addition to that, Phoenix is 1.99 times more volatile than Nio Class A. It trades about -0.15 of its total potential returns per unit of risk. Nio Class A is currently generating about 0.03 per unit of volatility. If you would invest 436.00 in Nio Class A on November 1, 2024 and sell it today you would earn a total of 3.00 from holding Nio Class A or generate 0.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Phoenix Motor Common vs. Nio Class A
Performance |
| Timeline |
| Phoenix Motor Common |
| Nio Class A |
Phoenix and Nio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Phoenix and Nio
The main advantage of trading using opposite Phoenix and Nio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Phoenix position performs unexpectedly, Nio 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 Nio will offset losses from the drop in Nio's long position.| Phoenix vs. GreenPower Motor | Phoenix vs. Envirotech Vehicles | Phoenix vs. Volcon Inc | Phoenix vs. Zapp Electric Vehicles |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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