Correlation Between SSC Technologies and Nio Inc

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

Diversification Opportunities for SSC Technologies and Nio Inc

0.27
  Correlation Coefficient

Modest diversification

The 3 months correlation between SSC Technologies and Nio Inc is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding SSC Technologies 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 SSC Technologies 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 SSC Technologies 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 SSC Technologies i.e., SSC Technologies and Nio Inc go up and down completely randomly.

Pair Corralation between SSC Technologies and Nio Inc

Given the investment horizon of 90 days SSC Technologies is expected to under-perform the Nio Inc. But the stock apears to be less risky and, when comparing its historical volatility, SSC Technologies is 3.03 times less risky than Nio Inc. The stock trades about -0.2 of its potential returns per unit of risk. The Nio Inc ADR is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  1,808  in Nio Inc ADR on April 4, 2022 and sell it today you would earn a total of  328.00  from holding Nio Inc ADR or generate 18.14% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

SSC Technologies  vs.  Nio Inc ADR

 Performance (%) 
      Timeline 
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 sluggish 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 ADR 
Nio Inc Performance
0 of 100
Over the last 90 days Nio Inc ADR has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward indicators, Nio Inc is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Structure and Payout Changes

Dividend Date
2016-05-02

Nio Inc Price Channel

SSC Technologies and Nio Inc Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with SSC Technologies and Nio Inc

The main advantage of trading using opposite SSC Technologies and Nio Inc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SSC Technologies 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.

SSC Technologies

Pair trading matchups for SSC Technologies

The idea behind SSC Technologies 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

Alphabet vs. Nio Inc
RENEWI PLC vs. Nio Inc
Sentinelone Inc vs. Nio Inc
GLAXOSMITHKLINE PLC vs. Nio Inc
Cyclacel Pharmaceuti vs. Nio Inc
BP PLC vs. Nio Inc
Vmware vs. Nio Inc
Solo Brands vs. Nio Inc
Alzamend Neuro vs. Nio Inc
Visa vs. Nio Inc
Calyxt vs. Nio Inc
Seneca Foods vs. Nio Inc
The effect of pair diversification on risk is to reduce it, but we should note this doesn't apply to all risk types. When we trade pairs against Nio Inc as a counterpart, there is always some inherent risk that will never be diversified away no matter what. This volatility limits the effect of tactical diversification using pair trading. Nio Inc's systematic risk is the inherent uncertainty of the entire market, and therefore cannot be mitigated even by pair-trading it against the equity that is not highly correlated to it. On the other hand, Nio Inc's unsystematic risk describes the types of risk that we can protect against, at least to some degree, by selecting a matching pair that is not perfectly correlated to Nio Inc ADR.
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.

Other Complementary Tools

Portfolio Diagnostics
Use generated alerts and portfolio events aggregator to diagnose current holdings
Go
Bollinger Bands
Use Bollinger Bands indicator to analyze target price for a given investing horizon
Go
Price Exposure Probability
Analyze equity upside and downside potential for a given time horizon across multiple markets
Go
Portfolio Volatility
Check portfolio volatility and analyze historical return density to properly model market risk
Go
Shere Portfolio
Track or share privately all of your investments from the convenience of any device
Go
Portfolio Optimization
Compute new portfolio that will generate highest expected return given your specified tolerance for risk
Go