Correlation Between Mangels Industrial and NVIDIA

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

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

Diversification Opportunities for Mangels Industrial and NVIDIA

-0.49

Correlation Coefficient

Mangels Industrial  NVIDIA

Very good diversification

The 3 months correlation between Mangels and NVIDIA is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Mangels Industrial SA and NVIDIA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NVIDIA and Mangels Industrial 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 Mangels Industrial SA 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 Mangels Industrial i.e., Mangels Industrial and NVIDIA go up and down completely randomly.

Pair Corralation between Mangels Industrial and NVIDIA

Assuming the 90 days trading horizon Mangels Industrial SA is expected to generate 2.48 times more return on investment than NVIDIA. However, Mangels Industrial is 2.48 times more volatile than NVIDIA. It trades about 0.06 of its potential returns per unit of risk. NVIDIA is currently generating about 0.04 per unit of risk. If you would invest  697.00  in Mangels Industrial SA on October 25, 2024 and sell it today you would earn a total of  28.00  from holding Mangels Industrial SA or generate 4.02% return on investment over 90 days.

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

Mangels Industrial SA  vs.  NVIDIA

Mangels Industrial

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mangels Industrial SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Mangels Industrial is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

NVIDIA

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in NVIDIA are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental indicators, NVIDIA may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Mangels Industrial and NVIDIA

The main advantage of trading using opposite Mangels Industrial and NVIDIA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mangels Industrial 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 Mangels Industrial SA 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.

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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.