Correlation Between Mercedes Benz and Nio
Can any of the company-specific risk be diversified away by investing in both Mercedes Benz and Nio 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 Mercedes Benz and Nio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mercedes Benz Group and Nio Class A, you can compare the effects of market volatilities on Mercedes Benz and Nio 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 Mercedes Benz with a short position of Nio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mercedes Benz and Nio.
Diversification Opportunities for Mercedes Benz and Nio
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Mercedes and Nio is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Mercedes Benz Group and Nio Class A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nio Class A and Mercedes Benz 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 Mercedes Benz Group are associated (or correlated) with Nio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nio Class A has no effect on the direction of Mercedes Benz i.e., Mercedes Benz and Nio go up and down completely randomly.
Pair Corralation between Mercedes Benz and Nio
If you would invest (100.00) in Mercedes Benz Group on January 24, 2024 and sell it today you would earn a total of 100.00 from holding Mercedes Benz Group or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Mercedes Benz Group vs. Nio Class A
Performance |
| Timeline |
| Mercedes Benz Group |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Nio Class A |
Mercedes Benz and Nio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mercedes Benz and Nio
The main advantage of trading using opposite Mercedes Benz and Nio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mercedes Benz position performs unexpectedly, Nio 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 will offset losses from the drop in Nio's long position.| Mercedes Benz vs. Texas Roadhouse | Mercedes Benz vs. Asbury Automotive Group | Mercedes Benz vs. BBB Foods | Mercedes Benz vs. GMS 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 the Stocks Directory module to find actively traded stocks across global markets.
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