Correlation Between Nikola Corp and Sysorex

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

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

Diversification Opportunities for Nikola Corp and Sysorex

0.0

Correlation Coefficient

Nikola Corp  Sysorex

Pay attention - limited upside

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

Pair Corralation between Nikola Corp and Sysorex

Given the investment horizon of 90 days Nikola Corp is expected to under-perform the Sysorex. But the stock apears to be less risky and, when comparing its historical volatility, Nikola Corp is 10.98 times less risky than Sysorex. The stock trades about -0.07 of its potential returns per unit of risk. The Sysorex is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  100.00  in Sysorex on October 23, 2024 and sell it today you would lose (99.99) from holding Sysorex or give up 99.99% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	96.76%
Values	Daily Returns

Nikola Corp  vs.  Sysorex

Nikola Corp

Risk-Adjusted Performance

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

Sysorex

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sysorex has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Sysorex is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Nikola Corp and Sysorex

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

The idea behind Nikola Corp and Sysorex 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.