Correlation Between NVIDIA and Mindax

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

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

Diversification Opportunities for NVIDIA and Mindax

-0.12

Correlation Coefficient

NVIDIA  Mindax

Good diversification

The 3 months correlation between NVIDIA and Mindax is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding NVIDIA and Mindax Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mindax Limited 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 Mindax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mindax Limited has no effect on the direction of NVIDIA i.e., NVIDIA and Mindax go up and down completely randomly.

Pair Corralation between NVIDIA and Mindax

Given the investment horizon of 90 days NVIDIA is expected to under-perform the Mindax. But the stock apears to be less risky and, when comparing its historical volatility, NVIDIA is 1.41 times less risky than Mindax. The stock trades about -0.11 of its potential returns per unit of risk. The Mindax Limited is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest  4.20  in Mindax Limited on October 5, 2024 and sell it today you would lose (0.20) from holding Mindax Limited or give up 4.76% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.0%
Values	Daily Returns

NVIDIA  vs.  Mindax Limited

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.

Mindax Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mindax Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with NVIDIA and Mindax

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

The idea behind NVIDIA and Mindax Limited 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.