Correlation Between NVIDIA and Dor Copper

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

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

Diversification Opportunities for NVIDIA and Dor Copper

0.38

Correlation Coefficient

NVIDIA  Dor Copper

Weak diversification

The 3 months correlation between NVIDIA and Dor is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding NVIDIA and Dor Copper Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dor Copper Mining 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 Dor Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dor Copper Mining has no effect on the direction of NVIDIA i.e., NVIDIA and Dor Copper go up and down completely randomly.

Pair Corralation between NVIDIA and Dor Copper

Given the investment horizon of 90 days NVIDIA is expected to generate 0.41 times more return on investment than Dor Copper. However, NVIDIA is 2.43 times less risky than Dor Copper. It trades about -0.11 of its potential returns per unit of risk. Dor Copper Mining is currently generating about -0.07 per unit of risk. If you would invest  14,513  in NVIDIA on October 5, 2024 and sell it today you would lose (682.00) from holding NVIDIA or give up 4.7% of portfolio value over 90 days.

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

NVIDIA  vs.  Dor Copper Mining

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 unsteady fundamental indicators, NVIDIA may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Dor Copper Mining

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Dor Copper Mining are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile primary indicators, Dor Copper reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with NVIDIA and Dor Copper

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

The idea behind NVIDIA and Dor Copper Mining 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.