Correlation Between Blue Bird and Niu Technologies
Can any of the company-specific risk be diversified away by investing in both Blue Bird 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 Blue Bird and Niu Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Blue Bird Corp and Niu Technologies, you can compare the effects of market volatilities on Blue Bird 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 Blue Bird with a short position of Niu Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blue Bird and Niu Technologies.
Diversification Opportunities for Blue Bird and Niu Technologies
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Blue and Niu is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Blue Bird Corp and Niu Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Niu Technologies and Blue Bird 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 Blue Bird Corp 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 Blue Bird i.e., Blue Bird and Niu Technologies go up and down completely randomly.
Pair Corralation between Blue Bird and Niu Technologies
Given the investment horizon of 90 days Blue Bird Corp is expected to under-perform the Niu Technologies. But the stock apears to be less risky and, when comparing its historical volatility, Blue Bird Corp is 3.29 times less risky than Niu Technologies. The stock trades about -0.05 of its potential returns per unit of risk. The Niu Technologies is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 171.00 in Niu Technologies on January 20, 2024 and sell it today you would earn a total of 32.00 from holding Niu Technologies or generate 18.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Blue Bird Corp vs. Niu Technologies
Performance |
| Timeline |
| Blue Bird Corp |
| Niu Technologies |
Blue Bird and Niu Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blue Bird and Niu Technologies
The main advantage of trading using opposite Blue Bird and Niu Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blue Bird 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.| Blue Bird vs. Vicinity Motor Corp | Blue Bird vs. AYRO Inc | Blue Bird vs. Canoo Inc | Blue Bird vs. Hyzon Motors |
| Niu Technologies vs. Ford Motor | Niu Technologies vs. General Motors | Niu Technologies vs. Goodyear Tire Rubber | Niu Technologies vs. Li AutoInc |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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