Correlation Between Niu Technologies and Seaport Entertainment

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

By analyzing existing cross correlation between Niu Technologies and Seaport Entertainment Group, you can compare the effects of market volatilities on Niu Technologies and Seaport Entertainment 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 Niu Technologies with a short position of Seaport Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Niu Technologies and Seaport Entertainment.

Diversification Opportunities for Niu Technologies and Seaport Entertainment

-0.18

Correlation Coefficient

Niu Technologies  Seaport Entertainment

Good diversification

The 3 months correlation between Niu and Seaport is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Niu Technologies and Seaport Entertainment Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seaport Entertainment and Niu Technologies 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 Niu Technologies are associated (or correlated) with Seaport Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seaport Entertainment has no effect on the direction of Niu Technologies i.e., Niu Technologies and Seaport Entertainment go up and down completely randomly.

Pair Corralation between Niu Technologies and Seaport Entertainment

Considering the 90-day investment horizon Niu Technologies is expected to generate 1.13 times more return on investment than Seaport Entertainment. However, Niu Technologies is 1.13 times more volatile than Seaport Entertainment Group. It trades about 0.14 of its potential returns per unit of risk. Seaport Entertainment Group is currently generating about -0.06 per unit of risk. If you would invest  183.00  in Niu Technologies on November 19, 2024 and sell it today you would earn a total of  47.00  from holding Niu Technologies or generate 25.68% return on investment over 90 days.

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

Niu Technologies  vs.  Seaport Entertainment Group

Niu Technologies

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Niu Technologies are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively abnormal forward indicators, Niu Technologies unveiled solid returns over the last few months and may actually be approaching a breakup point.

Seaport Entertainment

Risk-Adjusted Performance

Very Weak

Over the last 90 days Seaport Entertainment Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest abnormal performance, the Stock's technical and fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Niu Technologies and Seaport Entertainment

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

The idea behind Niu Technologies and Seaport Entertainment Group 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.