Correlation Between Worksport and Nio
Can any of the company-specific risk be diversified away by investing in both Worksport 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 Worksport and Nio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Worksport and Nio Class A, you can compare the effects of market volatilities on Worksport 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 Worksport with a short position of Nio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Worksport and Nio.
Diversification Opportunities for Worksport and Nio
Very good diversification
The 3 months correlation between Worksport and Nio is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Worksport 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 Worksport 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 Worksport 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 Worksport i.e., Worksport and Nio go up and down completely randomly.
Pair Corralation between Worksport and Nio
Given the investment horizon of 90 days Worksport is expected to generate 1.96 times more return on investment than Nio. However, Worksport is 1.96 times more volatile than Nio Class A. It trades about -0.13 of its potential returns per unit of risk. Nio Class A is currently generating about -0.26 per unit of risk. If you would invest 78.00 in Worksport on August 30, 2024 and sell it today you would lose (19.00) from holding Worksport or give up 24.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Worksport vs. Nio Class A
Performance |
| Timeline |
| Worksport |
| Nio Class A |
Worksport and Nio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Worksport and Nio
The main advantage of trading using opposite Worksport and Nio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Worksport 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.| Worksport vs. Aeye Inc | Worksport vs. Luminar Technologies | Worksport vs. Modine Manufacturing | Worksport vs. Quantumscape 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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