Correlation Between Nio Inc and SSC Technologies

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Can any of the company-specific risk be diversified away by investing in both Nio Inc and SSC 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 Nio Inc and SSC Technologies 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 SSC Technologies, you can compare the effects of market volatilities on Nio Inc and SSC 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 Nio Inc with a short position of SSC Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nio Inc and SSC Technologies.

Diversification Opportunities for Nio Inc and SSC Technologies

0.27
  Correlation Coefficient

Modest diversification

The 3 months correlation between Nio Inc and SSC Technologies is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Nio Inc ADR and SSC Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SSC Technologies 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 SSC Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SSC Technologies has no effect on the direction of Nio Inc i.e., Nio Inc and SSC Technologies go up and down completely randomly.

Pair Corralation between Nio Inc and SSC Technologies

Considering the 90-day investment horizon Nio Inc ADR is expected to under-perform the SSC Technologies. In addition to that, Nio Inc is 3.34 times more volatile than SSC Technologies. It trades about -0.02 of its total potential returns per unit of risk. SSC Technologies is currently generating about -0.04 per unit of volatility. If you would invest  7,317  in SSC Technologies on April 6, 2022 and sell it today you would lose (1,393)  from holding SSC Technologies or give up 19.04% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Nio Inc ADR  vs.  SSC Technologies

 Performance (%) 
      Timeline 
Nio Inc ADR 
Nio Inc Performance
2 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Nio Inc ADR are ranked lower than 2 (%) 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.

Structure and Payout Changes

Dividend Date
2016-05-02

Nio Inc Price Channel

SSC Technologies 
SSC Technologies Performance
0 of 100
Over the last 90 days SSC Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in August 2022. The current disturbance may also be a sign of long term up-swing for the company investors.

Structure and Payout Changes

Forward Annual Dividend Yield
0.0136
Payout Ratio
0.15
Last Split Factor
2:1
Forward Annual Dividend Rate
0.8
Dividend Date
2022-06-15
Ex Dividend Date
2022-05-31
Last Split Date
2016-06-27

SSC Technologies Price Channel

Nio Inc and SSC Technologies Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Nio Inc and SSC Technologies

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

Nio Inc ADR

Pair trading matchups for Nio Inc

The idea behind Nio Inc ADR and SSC 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.

SSC Technologies

Pair trading matchups for SSC Technologies

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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.

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