Correlation Between Kubota and Nikola Corp
Can any of the company-specific risk be diversified away by investing in both Kubota 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 Kubota and Nikola Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kubota and Nikola Corp, you can compare the effects of market volatilities on Kubota 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 Kubota with a short position of Nikola Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kubota and Nikola Corp.
Diversification Opportunities for Kubota and Nikola Corp
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Kubota and Nikola is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Kubota and Nikola Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nikola Corp and Kubota 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 Kubota 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 Kubota i.e., Kubota and Nikola Corp go up and down completely randomly.
Pair Corralation between Kubota and Nikola Corp
Assuming the 90 days horizon Kubota is expected to generate 0.26 times more return on investment than Nikola Corp. However, Kubota is 3.85 times less risky than Nikola Corp. It trades about -0.17 of its potential returns per unit of risk. Nikola Corp is currently generating about -0.28 per unit of risk. If you would invest 1,450 in Kubota on September 19, 2024 and sell it today you would lose (282.00) from holding Kubota or give up 19.45% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 98.44% |
Values | Daily Returns |
Kubota vs. Nikola Corp
Performance |
Timeline |
Kubota |
Nikola Corp |
Kubota and Nikola Corp Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Kubota and Nikola Corp
The main advantage of trading using opposite Kubota and Nikola Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kubota 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 Kubota 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.Nikola Corp vs. Lion Electric Corp | ||
Nikola Corp vs. Xos Inc | ||
Nikola Corp vs. Hydrofarm Holdings Group | ||
Nikola Corp vs. Caterpillar |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
Other Complementary Tools
Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
FinTech Suite Use AI to screen and filter profitable investment opportunities | |
Stocks Directory Find actively traded stocks across global markets |