Correlation Between Liquidia Corp and Nio Inc

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Liquidia Corp and Nio Inc 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 Liquidia Corp and Nio Inc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Liquidia Corp and Nio Inc ADR, you can compare the effects of market volatilities on Liquidia Corp and Nio Inc 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 Liquidia Corp with a short position of Nio Inc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liquidia Corp and Nio Inc.

Diversification Opportunities for Liquidia Corp and Nio Inc

0.03
  Correlation Coefficient

Significant diversification

The 3 months correlation between Liquidia and Nio Inc is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Liquidia Corp and Nio Inc ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nio Inc ADR and Liquidia 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 Liquidia Corp are associated (or correlated) with Nio Inc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nio Inc ADR has no effect on the direction of Liquidia Corp i.e., Liquidia Corp and Nio Inc go up and down completely randomly.

Pair Corralation between Liquidia Corp and Nio Inc

Given the investment horizon of 90 days Liquidia Corp is expected to generate 4.36 times more return on investment than Nio Inc. However, Liquidia Corp is 4.36 times more volatile than Nio Inc ADR. It trades about 0.31 of its potential returns per unit of risk. Nio Inc ADR is currently generating about 0.02 per unit of risk. If you would invest  373.00  in Liquidia Corp on May 19, 2022 and sell it today you would earn a total of  372.00  from holding Liquidia Corp or generate 99.73% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Liquidia Corp  vs.  Nio Inc ADR

 Performance (%) 
       Timeline  
Liquidia Corp 
Liquidia Performance
6 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Liquidia Corp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain fundamental indicators, Liquidia Corp sustained solid returns over the last few months and may actually be approaching a breakup point.

Liquidia Price Channel

Nio Inc ADR 
Nio Inc Performance
7 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Nio Inc ADR are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite quite weak forward indicators, Nio Inc disclosed solid returns over the last few months and may actually be approaching a breakup point.

Nio Inc Price Channel

Liquidia Corp and Nio Inc Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Liquidia Corp and Nio Inc

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

Liquidia Corp

Pair trading matchups for Liquidia Corp

The idea behind Liquidia Corp and Nio Inc ADR 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.

Nio Inc ADR

Pair trading matchups for Nio Inc

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 Equity Valuation module to check real value of public entities based on technical and fundamental data.

Other Complementary Tools

Stock Screener
Find equities using custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook.
Go
Piotroski F Score
Get Piotroski F Score based on binary analysis strategy of nine different fundamentals
Go
Portfolio Center
All portfolio management and optimization tools to improve performance of your portfolios
Go
Performance Analysis
Check effects of mean-variance optimization against your current asset allocation
Go
Equity Search
Search for actively traded equities including funds and ETFs from over 30 global markets
Go
Idea Analyzer
Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas
Go
ETF Directory
Find actively traded Exchange Traded Funds (ETF) from around the world
Go