Correlation Between Nio Inc and Perficient

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

Diversification Opportunities for Nio Inc and Perficient

0.09
  Correlation Coefficient

Significant diversification

The 3 months correlation between Nio Inc and Perficient is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Nio Inc ADR and Perficient in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perficient and Nio Inc 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 Nio Inc ADR are associated (or correlated) with Perficient. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Perficient has no effect on the direction of Nio Inc i.e., Nio Inc and Perficient go up and down completely randomly.

Pair Corralation between Nio Inc and Perficient

Considering the 90-day investment horizon Nio Inc ADR is expected to generate 2.34 times more return on investment than Perficient. However, Nio Inc is 2.34 times more volatile than Perficient. It trades about 0.07 of its potential returns per unit of risk. Perficient is currently generating about -0.21 per unit of risk. If you would invest  1,965  in Nio Inc ADR on April 8, 2022 and sell it today you would earn a total of  118.00  from holding Nio Inc ADR or generate 6.01% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Nio Inc ADR  vs.  Perficient

 Performance (%) 
      Timeline 
Nio Inc ADR 
Nio Inc Performance
3 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Nio Inc ADR are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward indicators, Nio Inc disclosed solid returns over the last few months and may actually be approaching a breakup point.

Structure and Payout Changes

Dividend Date
2016-05-02

Nio Inc Price Channel

Perficient 
Perficient Performance
0 of 100
Over the last 90 days Perficient has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest conflicting performance, the Stock's technical and fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Perficient Price Channel

Nio Inc and Perficient Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Nio Inc and Perficient

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

Nio Inc ADR

Pair trading matchups for Nio Inc

The idea behind Nio Inc ADR and Perficient 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 Focused Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.

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