Correlation Between Zapp Electric and NFI
Can any of the company-specific risk be diversified away by investing in both Zapp Electric and NFI 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 Zapp Electric and NFI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Zapp Electric Vehicles and NFI Group, you can compare the effects of market volatilities on Zapp Electric and NFI 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 Zapp Electric with a short position of NFI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zapp Electric and NFI.
Diversification Opportunities for Zapp Electric and NFI
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Zapp and NFI is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Zapp Electric Vehicles and NFI Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NFI Group and Zapp Electric 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 Zapp Electric Vehicles are associated (or correlated) with NFI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NFI Group has no effect on the direction of Zapp Electric i.e., Zapp Electric and NFI go up and down completely randomly.
Pair Corralation between Zapp Electric and NFI
Assuming the 90 days horizon Zapp Electric Vehicles is expected to generate 1.88 times more return on investment than NFI. However, Zapp Electric is 1.88 times more volatile than NFI Group. It trades about 0.07 of its potential returns per unit of risk. NFI Group is currently generating about -0.01 per unit of risk. If you would invest 0.80 in Zapp Electric Vehicles on December 26, 2024 and sell it today you would earn a total of 0.12 from holding Zapp Electric Vehicles or generate 15.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 98.36% |
Values | Daily Returns |
Zapp Electric Vehicles vs. NFI Group
Performance |
Timeline |
Zapp Electric Vehicles |
NFI Group |
Zapp Electric and NFI Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Zapp Electric and NFI
The main advantage of trading using opposite Zapp Electric and NFI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zapp Electric position performs unexpectedly, NFI 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 NFI will offset losses from the drop in NFI's long position.Zapp Electric vs. Ryanair Holdings PLC | Zapp Electric vs. The Mosaic | Zapp Electric vs. Delta Air Lines | Zapp Electric vs. Ecolab Inc |
NFI vs. Zapp Electric Vehicles | NFI vs. Guangzhou Automobile Group | NFI vs. Exor NV | NFI vs. Aston Martin Lagonda |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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