Correlation Between NVIDIA and Amundi ETF

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

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

Diversification Opportunities for NVIDIA and Amundi ETF

-0.6

Correlation Coefficient

NVIDIA  Amundi ETF

Excellent diversification

The 3 months correlation between NVIDIA and Amundi is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding NVIDIA and Amundi ETF MSCI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amundi ETF MSCI and NVIDIA 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 are associated (or correlated) with Amundi ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amundi ETF MSCI has no effect on the direction of NVIDIA i.e., NVIDIA and Amundi ETF go up and down completely randomly.

Pair Corralation between NVIDIA and Amundi ETF

Given the investment horizon of 90 days NVIDIA is expected to generate 4.25 times more return on investment than Amundi ETF. However, NVIDIA is 4.25 times more volatile than Amundi ETF MSCI. It trades about 0.0 of its potential returns per unit of risk. Amundi ETF MSCI is currently generating about -0.1 per unit of risk. If you would invest  14,506  in NVIDIA on October 6, 2024 and sell it today you would lose (59.00) from holding NVIDIA or give up 0.41% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	85.0%
Values	Daily Returns

NVIDIA  vs.  Amundi ETF MSCI

NVIDIA

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in NVIDIA are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady fundamental indicators, NVIDIA sustained solid returns over the last few months and may actually be approaching a breakup point.

Amundi ETF MSCI

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Amundi ETF MSCI has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable primary indicators, Amundi ETF is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with NVIDIA and Amundi ETF

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

The idea behind NVIDIA and Amundi ETF MSCI 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.