Correlation Between Volcon and Niu Technologies

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

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

Diversification Opportunities for Volcon and Niu Technologies

-0.66

Correlation Coefficient

Volcon  Niu Technologies

Excellent diversification

The 3 months correlation between Volcon and Niu is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Volcon Inc and Niu Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Niu Technologies and Volcon 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 Volcon Inc are associated (or correlated) with Niu Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Niu Technologies has no effect on the direction of Volcon i.e., Volcon and Niu Technologies go up and down completely randomly.

Pair Corralation between Volcon and Niu Technologies

Given the investment horizon of 90 days Volcon Inc is expected to under-perform the Niu Technologies. In addition to that, Volcon is 1.43 times more volatile than Niu Technologies. It trades about -0.24 of its total potential returns per unit of risk. Niu Technologies is currently generating about 0.3 per unit of volatility. If you would invest  189.00  in Niu Technologies on December 27, 2024 and sell it today you would earn a total of  291.50  from holding Niu Technologies or generate 154.23% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.36%
Values	Daily Returns

Volcon Inc  vs.  Niu Technologies

Volcon Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Volcon Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's fundamental indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Niu Technologies

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Niu Technologies are ranked lower than 23 (%) 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.

Pair Trading with Volcon and Niu Technologies

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

The idea behind Volcon Inc and Niu Technologies 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.

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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.