Correlation Between NVIDIA and Ferrovial

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

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

Diversification Opportunities for NVIDIA and Ferrovial

0.0

Correlation Coefficient

NVIDIA  Ferrovial

Pay attention - limited upside

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

Pair Corralation between NVIDIA and Ferrovial

If you would invest (100.00) in Ferrovial on December 30, 2024 and sell it today you would earn a total of  100.00  from holding Ferrovial or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

NVIDIA  vs.  Ferrovial

NVIDIA

Risk-Adjusted Performance

Very Weak

Over the last 90 days NVIDIA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's fundamental indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Ferrovial

Risk-Adjusted Performance

Very Weak

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

Pair Trading with NVIDIA and Ferrovial

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

The idea behind NVIDIA and Ferrovial 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.