Correlation Between Nikola Corp and Daimler Truck
Can any of the company-specific risk be diversified away by investing in both Nikola Corp and Daimler Truck 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 Nikola Corp and Daimler Truck into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nikola Corp and Daimler Truck Holding, you can compare the effects of market volatilities on Nikola Corp and Daimler Truck 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 Nikola Corp with a short position of Daimler Truck. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nikola Corp and Daimler Truck.
Diversification Opportunities for Nikola Corp and Daimler Truck
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Nikola and Daimler is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Nikola Corp and Daimler Truck Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daimler Truck Holding and Nikola Corp 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 Nikola Corp are associated (or correlated) with Daimler Truck. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daimler Truck Holding has no effect on the direction of Nikola Corp i.e., Nikola Corp and Daimler Truck go up and down completely randomly.
Pair Corralation between Nikola Corp and Daimler Truck
Given the investment horizon of 90 days Nikola Corp is expected to under-perform the Daimler Truck. In addition to that, Nikola Corp is 13.83 times more volatile than Daimler Truck Holding. It trades about -0.14 of its total potential returns per unit of risk. Daimler Truck Holding is currently generating about 0.15 per unit of volatility. If you would invest 2,117 in Daimler Truck Holding on December 5, 2024 and sell it today you would earn a total of 116.00 from holding Daimler Truck Holding or generate 5.48% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Nikola Corp vs. Daimler Truck Holding
Performance |
Timeline |
Nikola Corp |
Daimler Truck Holding |
Nikola Corp and Daimler Truck Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Nikola Corp and Daimler Truck
The main advantage of trading using opposite Nikola Corp and Daimler Truck positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nikola Corp position performs unexpectedly, Daimler Truck 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 Daimler Truck will offset losses from the drop in Daimler Truck's long position.Nikola Corp vs. Xos Inc | Nikola Corp vs. Hydrofarm Holdings Group | Nikola Corp vs. Caterpillar | Nikola Corp vs. AGCO Corporation |
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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