Correlation Between NVIDIA and International Bethlehem

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

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

Diversification Opportunities for NVIDIA and International Bethlehem

0.0

Correlation Coefficient

NVIDIA  International Bethlehem

Pay attention - limited upside

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

Pair Corralation between NVIDIA and International Bethlehem

If you would invest  13,990  in NVIDIA on October 6, 2024 and sell it today you would earn a total of  457.00  from holding NVIDIA or generate 3.27% return on investment over 90 days.

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

NVIDIA  vs.  International Bethlehem Mining

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.

International Bethlehem

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days International Bethlehem Mining has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental drivers, International Bethlehem is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with NVIDIA and International Bethlehem

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

The idea behind NVIDIA and International Bethlehem 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.