Correlation Between Bridger Aerospace and NVIDIA

Can any of the company-specific risk be diversified away by investing in both Bridger Aerospace and NVIDIA 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 Bridger Aerospace and NVIDIA into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Bridger Aerospace Group and NVIDIA, you can compare the effects of market volatilities on Bridger Aerospace and NVIDIA 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 Bridger Aerospace with a short position of NVIDIA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bridger Aerospace and NVIDIA.

Diversification Opportunities for Bridger Aerospace and NVIDIA

0.59

Correlation Coefficient

Bridger Aerospace  NVIDIA

Very weak diversification

The 3 months correlation between Bridger and NVIDIA is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Bridger Aerospace Group and NVIDIA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NVIDIA and Bridger Aerospace 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 Bridger Aerospace Group are associated (or correlated) with NVIDIA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NVIDIA has no effect on the direction of Bridger Aerospace i.e., Bridger Aerospace and NVIDIA go up and down completely randomly.

Pair Corralation between Bridger Aerospace and NVIDIA

Given the investment horizon of 90 days Bridger Aerospace Group is expected to under-perform the NVIDIA. In addition to that, Bridger Aerospace is 1.64 times more volatile than NVIDIA. It trades about -0.11 of its total potential returns per unit of risk. NVIDIA is currently generating about -0.07 per unit of volatility. If you would invest  13,748  in NVIDIA on December 29, 2024 and sell it today you would lose (2,781) from holding NVIDIA or give up 20.23% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Bridger Aerospace Group  vs.  NVIDIA

Bridger Aerospace

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bridger Aerospace Group has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unsteady performance in the last few months, the Stock's technical and fundamental indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

NVIDIA

Risk-Adjusted Performance

Very Weak

Over the last 90 days NVIDIA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's fundamental indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Bridger Aerospace and NVIDIA

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

The idea behind Bridger Aerospace Group and NVIDIA 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.

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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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.