Correlation Between NVIDIA CDR and Maple Peak

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

By analyzing existing cross correlation between NVIDIA CDR and Maple Peak Investments, you can compare the effects of market volatilities on NVIDIA CDR and Maple Peak 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 Maple Peak. Check out your portfolio center. Please also check ongoing floating volatility patterns of NVIDIA CDR and Maple Peak.

Diversification Opportunities for NVIDIA CDR and Maple Peak

0.0

Correlation Coefficient

NVIDIA CDR  Maple Peak

Pay attention - limited upside

The 3 months correlation between NVIDIA and Maple is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding NVIDIA CDR and Maple Peak Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maple Peak Investments 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 Maple Peak. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maple Peak Investments has no effect on the direction of NVIDIA CDR i.e., NVIDIA CDR and Maple Peak go up and down completely randomly.

Pair Corralation between NVIDIA CDR and Maple Peak

Assuming the 90 days trading horizon NVIDIA CDR is expected to generate 1.46 times less return on investment than Maple Peak. But when comparing it to its historical volatility, NVIDIA CDR is 4.08 times less risky than Maple Peak. It trades about 0.15 of its potential returns per unit of risk. Maple Peak Investments is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  1.00  in Maple Peak Investments on October 4, 2024 and sell it today you would earn a total of  0.00  from holding Maple Peak Investments or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

NVIDIA CDR  vs.  Maple Peak Investments

NVIDIA CDR

Risk-Adjusted Performance

5 of 100

Modest

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

Maple Peak Investments

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Maple Peak Investments has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Maple Peak is not utilizing all of its potentials. The newest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with NVIDIA CDR and Maple Peak

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

The idea behind NVIDIA CDR and Maple Peak Investments 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.