Correlation Between Nikola Corp and Integrated Ventures

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

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

Diversification Opportunities for Nikola Corp and Integrated Ventures

0.93

Correlation Coefficient

Nikola Corp  Integrated Ventures

Almost no diversification

The 3 months correlation between Nikola and Integrated is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Nikola Corp and Integrated Ventures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Integrated Ventures 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 Integrated Ventures. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Integrated Ventures has no effect on the direction of Nikola Corp i.e., Nikola Corp and Integrated Ventures go up and down completely randomly.

Pair Corralation between Nikola Corp and Integrated Ventures

Given the investment horizon of 90 days Nikola Corp is expected to under-perform the Integrated Ventures. In addition to that, Nikola Corp is 1.74 times more volatile than Integrated Ventures. It trades about -0.14 of its total potential returns per unit of risk. Integrated Ventures is currently generating about -0.24 per unit of volatility. If you would invest  145.00  in Integrated Ventures on December 2, 2024 and sell it today you would lose (117.00) from holding Integrated Ventures or give up 80.69% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Nikola Corp  vs.  Integrated Ventures

Nikola Corp

Risk-Adjusted Performance

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 April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Integrated Ventures

Risk-Adjusted Performance

Very Weak

Over the last 90 days Integrated Ventures has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Nikola Corp and Integrated Ventures

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

The idea behind Nikola Corp and Integrated Ventures 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.