Correlation Between Volcon and Niu Technologies
Can any of the company-specific risk be diversified away by investing in both Volcon and Niu Technologies 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 Volcon and Niu Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Volcon Inc and Niu Technologies, you can compare the effects of market volatilities on Volcon and Niu Technologies 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 Volcon with a short position of Niu Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Volcon and Niu Technologies.
Diversification Opportunities for Volcon and Niu Technologies
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Volcon and Niu is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Volcon Inc and Niu Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Niu Technologies and Volcon 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 Volcon Inc are associated (or correlated) with Niu Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Niu Technologies has no effect on the direction of Volcon i.e., Volcon and Niu Technologies go up and down completely randomly.
Pair Corralation between Volcon and Niu Technologies
Given the investment horizon of 90 days Volcon Inc is expected to under-perform the Niu Technologies. In addition to that, Volcon is 1.97 times more volatile than Niu Technologies. It trades about -0.18 of its total potential returns per unit of risk. Niu Technologies is currently generating about -0.02 per unit of volatility. If you would invest 505.00 in Niu Technologies on August 27, 2024 and sell it today you would lose (320.00) from holding Niu Technologies or give up 63.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Volcon Inc vs. Niu Technologies
Performance |
| Timeline |
| Volcon Inc |
| Niu Technologies |
Volcon and Niu Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Volcon and Niu Technologies
The main advantage of trading using opposite Volcon and Niu Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Volcon position performs unexpectedly, Niu Technologies 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 Niu Technologies will offset losses from the drop in Niu Technologies' long position.The idea behind Volcon Inc and Niu Technologies pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Niu Technologies vs. Xpeng Inc | Niu Technologies vs. Nio Class A | Niu Technologies vs. Lucid Group | Niu Technologies vs. BYD Co Ltd |
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 Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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