Correlation Between First Tractor and Nikola Corp

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

By analyzing existing cross correlation between First Tractor and Nikola Corp, you can compare the effects of market volatilities on First Tractor and Nikola Corp 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 First Tractor with a short position of Nikola Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Tractor and Nikola Corp.

Diversification Opportunities for First Tractor and Nikola Corp

0.0

Correlation Coefficient

First Tractor  Nikola Corp

Pay attention - limited upside

The 3 months correlation between First and Nikola is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding First Tractor and Nikola Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nikola Corp and First Tractor 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 First Tractor are associated (or correlated) with Nikola Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nikola Corp has no effect on the direction of First Tractor i.e., First Tractor and Nikola Corp go up and down completely randomly.

Pair Corralation between First Tractor and Nikola Corp

If you would invest  63.00  in First Tractor on September 22, 2024 and sell it today you would earn a total of  0.00  from holding First Tractor or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

First Tractor  vs.  Nikola Corp

First Tractor

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days First Tractor has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, First Tractor is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Nikola Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nikola Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite abnormal performance in the last few months, the Stock's essential indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with First Tractor and Nikola Corp

The main advantage of trading using opposite First Tractor and Nikola Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Tractor position performs unexpectedly, Nikola Corp 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 Nikola Corp will offset losses from the drop in Nikola Corp's long position.

The idea behind First Tractor and Nikola 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.

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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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.