Correlation Between Nio and Blue Bird

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Nio and Blue Bird 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 Nio and Blue Bird into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nio Class A and Blue Bird Corp, you can compare the effects of market volatilities on Nio and Blue Bird 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 Nio with a short position of Blue Bird. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nio and Blue Bird.

Diversification Opportunities for Nio and Blue Bird

-0.72
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Nio and Blue is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Nio Class A and Blue Bird Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blue Bird Corp and Nio 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 Nio Class A are associated (or correlated) with Blue Bird. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blue Bird Corp has no effect on the direction of Nio i.e., Nio and Blue Bird go up and down completely randomly.

Pair Corralation between Nio and Blue Bird

Considering the 90-day investment horizon Nio Class A is expected to under-perform the Blue Bird. In addition to that, Nio is 1.08 times more volatile than Blue Bird Corp. It trades about -0.04 of its total potential returns per unit of risk. Blue Bird Corp is currently generating about 0.08 per unit of volatility. If you would invest  1,224  in Blue Bird Corp on December 29, 2023 and sell it today you would earn a total of  2,561  from holding Blue Bird Corp or generate 209.23% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Nio Class A  vs.  Blue Bird Corp

 Performance 
       Timeline  
Nio Class A 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Nio Class A has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's forward indicators remain very healthy which may send shares a bit higher in April 2024. The recent disarray may also be a sign of long period up-swing for the firm investors.
Blue Bird Corp 

Risk-Adjusted Performance

17 of 100

 
Low
 
High
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Blue Bird Corp are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of rather abnormal fundamental drivers, Blue Bird exhibited solid returns over the last few months and may actually be approaching a breakup point.

Nio and Blue Bird Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Nio and Blue Bird

The main advantage of trading using opposite Nio and Blue Bird positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nio position performs unexpectedly, Blue Bird 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 Blue Bird will offset losses from the drop in Blue Bird's long position.
The idea behind Nio Class A and Blue Bird Corp 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.
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.

Other Complementary Tools

Content Syndication
Quickly integrate customizable finance content to your own investment portal
Bollinger Bands
Use Bollinger Bands indicator to analyze target price for a given investing horizon
Equity Forecasting
Use basic forecasting models to generate price predictions and determine price momentum
Aroon Oscillator
Analyze current equity momentum using Aroon Oscillator and other momentum ratios
Odds Of Bankruptcy
Get analysis of equity chance of financial distress in the next 2 years
Theme Ratings
Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance
Price Exposure Probability
Analyze equity upside and downside potential for a given time horizon across multiple markets
Equity Analysis
Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities
ETF Categories
List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments
Portfolio Comparator
Compare the composition, asset allocations and performance of any two portfolios in your account
Portfolio Suggestion
Get suggestions outside of your existing asset allocation including your own model portfolios