Tesla, Inc. is an American electric vehicle and clean energy company based in Palo Alto, California. Tesla's current products include electric cars, battery energy storage from home to grid scale, solar panels and solar roof tiles, and related products and services. Nikola Corporation is an American company that has announced a number of concept zero-emissions vehicles since 2016 and has indicated plans to produce some of them in the future. The company is based in Phoenix, Arizona, where its research and development facility is located. Nikola Corporation 35.79 USD 0.00% Tesla Inc 419.62 USD 0.00% 3 months 6 months YTD 1 year 5 years Маx Mon, 14 Sept 50.00% 0.00%- -50.00% -100.00% Oct 7 Nov 2 Nov 27 Question: Nikola's stock began trading on June 4, 2020. As of Dec 17, 2020, Nikola stock price have made 0.1049% expected daily return with 5.884% standard deviation, while Tesla stock price have made 0.1853% expected daily return with 3.533% standard deviation. The correlation coefficient of those stock is -0.7718, which is extraordinarily opposite. Which stock would you suggest to invest? Why? Provide an investment strategy based on the statistics and portfolio investment theory.

Tesla, Inc. is an American electric vehicle and clean energy company based in Palo Alto, California. Tesla's current products include electric cars, battery energy storage from home to grid scale, solar panels and solar roof tiles, and related products and services. Nikola Corporation is an American company that has announced a number of concept zero-emissions vehicles since 2016 and has indicated plans to produce some of them in the future. The company is based in Phoenix, Arizona, where its research and development facility is located. Nikola Corporation 35.79 USD 0.00% Tesla Inc 419.62 USD 0.00% 3 months 6 months YTD 1 year 5 years Маx Mon, 14 Sept 50.00% 0.00%- -50.00% -100.00% Oct 7 Nov 2 Nov 27 Question: Nikola's stock began trading on June 4, 2020. As of Dec 17, 2020, Nikola stock price have made 0.1049% expected daily return with 5.884% standard deviation, while Tesla stock price have made 0.1853% expected daily return with 3.533% standard deviation. The correlation coefficient of those stock is -0.7718, which is extraordinarily opposite. Which stock would you suggest to invest? Why? Provide an investment strategy based on the statistics and portfolio investment theory.

Survey of Accounting (Accounting I)

8th Edition

ISBN:9781305961883

Author:Carl Warren

Publisher:Carl Warren

Chapter12: Differential Analysis And Product Pricing

Section: Chapter Questions

Problem 2CDQ

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