Correlation Between NVIDIA CDR and Colliers International

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

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

Diversification Opportunities for NVIDIA CDR and Colliers International

0.71

Correlation Coefficient

NVIDIA CDR  Colliers International

Poor diversification

The 3 months correlation between NVIDIA and Colliers is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding NVIDIA CDR and Colliers International Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Colliers International and NVIDIA CDR 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 NVIDIA CDR are associated (or correlated) with Colliers International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Colliers International has no effect on the direction of NVIDIA CDR i.e., NVIDIA CDR and Colliers International go up and down completely randomly.

Pair Corralation between NVIDIA CDR and Colliers International

Assuming the 90 days trading horizon NVIDIA CDR is expected to generate 1.66 times more return on investment than Colliers International. However, NVIDIA CDR is 1.66 times more volatile than Colliers International Group. It trades about 0.17 of its potential returns per unit of risk. Colliers International Group is currently generating about 0.13 per unit of risk. If you would invest  2,537  in NVIDIA CDR on September 3, 2024 and sell it today you would earn a total of  703.00  from holding NVIDIA CDR or generate 27.71% return on investment over 90 days.

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

NVIDIA CDR  vs.  Colliers International Group

NVIDIA CDR

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in NVIDIA CDR are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating technical and fundamental indicators, NVIDIA CDR exhibited solid returns over the last few months and may actually be approaching a breakup point.

Colliers International

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Colliers International Group are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Colliers International may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with NVIDIA CDR and Colliers International

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

The idea behind NVIDIA CDR and Colliers International Group 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.