Correlation Between ChargePoint Holdings and Nio

Can any of the company-specific risk be diversified away by investing in both ChargePoint Holdings 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 ChargePoint Holdings and Nio into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ChargePoint Holdings and Nio Class A, you can compare the effects of market volatilities on ChargePoint Holdings 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 ChargePoint Holdings with a short position of Nio. Check out your portfolio center. Please also check ongoing floating volatility patterns of ChargePoint Holdings and Nio.

Diversification Opportunities for ChargePoint Holdings and Nio

-0.68

Correlation Coefficient

ChargePoint Holdings  Nio

Excellent diversification

The 3 months correlation between ChargePoint and Nio is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding ChargePoint Holdings 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 ChargePoint Holdings 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 ChargePoint Holdings 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 ChargePoint Holdings i.e., ChargePoint Holdings and Nio go up and down completely randomly.

Pair Corralation between ChargePoint Holdings and Nio

Given the investment horizon of 90 days ChargePoint Holdings is expected to under-perform the Nio. In addition to that, ChargePoint Holdings is 1.73 times more volatile than Nio Class A. It trades about -0.03 of its total potential returns per unit of risk. Nio Class A is currently generating about 0.13 per unit of volatility. If you would invest  398.00  in Nio Class A on May 5, 2025 and sell it today you would earn a total of  103.00  from holding Nio Class A or generate 25.88% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

ChargePoint Holdings  vs.  Nio Class A

ChargePoint Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days ChargePoint Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Nio Class A

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Nio Class A are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal forward indicators, Nio displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ChargePoint Holdings and Nio

The main advantage of trading using opposite ChargePoint Holdings and Nio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ChargePoint Holdings 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.

The idea behind ChargePoint Holdings and Nio Class A 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.

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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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.