Correlation Between Vicinity and NFI
Can any of the company-specific risk be diversified away by investing in both Vicinity 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 Vicinity and NFI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vicinity Motor Corp and NFI Group, you can compare the effects of market volatilities on Vicinity 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 Vicinity with a short position of NFI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vicinity and NFI.
Diversification Opportunities for Vicinity and NFI
Almost no diversification
The 3 months correlation between Vicinity and NFI is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Vicinity Motor Corp and NFI Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NFI Group and Vicinity 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 Vicinity Motor Corp 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 Vicinity i.e., Vicinity and NFI go up and down completely randomly.
Pair Corralation between Vicinity and NFI
Considering the 90-day investment horizon Vicinity Motor Corp is expected to under-perform the NFI. In addition to that, Vicinity is 11.77 times more volatile than NFI Group. It trades about -0.13 of its total potential returns per unit of risk. NFI Group is currently generating about -0.27 per unit of volatility. If you would invest 1,338 in NFI Group on September 15, 2024 and sell it today you would lose (374.00) from holding NFI Group or give up 27.95% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Vicinity Motor Corp vs. NFI Group
Performance |
Timeline |
Vicinity Motor Corp |
NFI Group |
Vicinity and NFI Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Vicinity and NFI
The main advantage of trading using opposite Vicinity and NFI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vicinity 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.Vicinity vs. Blue Bird Corp | Vicinity vs. AYRO Inc | Vicinity vs. BAIC Motor | Vicinity vs. Zapp Electric Vehicles |
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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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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