Correlation Between NVIDIA and SCANDINAV REAL

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

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

Diversification Opportunities for NVIDIA and SCANDINAV REAL

-0.05

Correlation Coefficient

NVIDIA  SCANDINAV REAL

Good diversification

The 3 months correlation between NVIDIA and SCANDINAV is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding NVIDIA and SCANDINAV REAL HEART in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCANDINAV REAL HEART 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 SCANDINAV REAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SCANDINAV REAL HEART has no effect on the direction of NVIDIA i.e., NVIDIA and SCANDINAV REAL go up and down completely randomly.

Pair Corralation between NVIDIA and SCANDINAV REAL

Given the investment horizon of 90 days NVIDIA is expected to generate 10.96 times less return on investment than SCANDINAV REAL. But when comparing it to its historical volatility, NVIDIA is 24.45 times less risky than SCANDINAV REAL. It trades about 0.15 of its potential returns per unit of risk. SCANDINAV REAL HEART is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  1,127  in SCANDINAV REAL HEART on October 6, 2024 and sell it today you would lose (1,031) from holding SCANDINAV REAL HEART or give up 91.48% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	97.83%
Values	Daily Returns

NVIDIA  vs.  SCANDINAV REAL HEART

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.

SCANDINAV REAL HEART

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SCANDINAV REAL HEART has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with NVIDIA and SCANDINAV REAL

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

The idea behind NVIDIA and SCANDINAV REAL HEART 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.