Correlation Between NVIDIA and Kaya Holdings

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

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

Diversification Opportunities for NVIDIA and Kaya Holdings

-0.24

Correlation Coefficient

NVIDIA  Kaya Holdings

Very good diversification

The 3 months correlation between NVIDIA and Kaya is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding NVIDIA and Kaya Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kaya Holdings 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 Kaya Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kaya Holdings has no effect on the direction of NVIDIA i.e., NVIDIA and Kaya Holdings go up and down completely randomly.

Pair Corralation between NVIDIA and Kaya Holdings

Given the investment horizon of 90 days NVIDIA is expected to generate 0.41 times more return on investment than Kaya Holdings. However, NVIDIA is 2.46 times less risky than Kaya Holdings. It trades about 0.0 of its potential returns per unit of risk. Kaya Holdings is currently generating about -0.01 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	Insignificant
Accuracy	100.0%
Values	Daily Returns

NVIDIA  vs.  Kaya Holdings

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.

Kaya Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kaya Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with NVIDIA and Kaya Holdings

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

The idea behind NVIDIA and Kaya Holdings 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.