Correlation Between NVIDIA and Amatheon Agri

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

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

Diversification Opportunities for NVIDIA and Amatheon Agri

-0.18

Correlation Coefficient

NVIDIA  Amatheon Agri

Good diversification

The 3 months correlation between NVIDIA and Amatheon is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding NVIDIA and Amatheon Agri Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amatheon Agri Holding 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 Amatheon Agri. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amatheon Agri Holding has no effect on the direction of NVIDIA i.e., NVIDIA and Amatheon Agri go up and down completely randomly.

Pair Corralation between NVIDIA and Amatheon Agri

Given the investment horizon of 90 days NVIDIA is expected to under-perform the Amatheon Agri. But the stock apears to be less risky and, when comparing its historical volatility, NVIDIA is 9.52 times less risky than Amatheon Agri. The stock trades about -0.11 of its potential returns per unit of risk. The Amatheon Agri Holding is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  2.25  in Amatheon Agri Holding on October 5, 2024 and sell it today you would earn a total of  0.75  from holding Amatheon Agri Holding or generate 33.33% return on investment over 90 days.

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

NVIDIA  vs.  Amatheon Agri Holding

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.

Amatheon Agri Holding

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Amatheon Agri Holding are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Amatheon Agri reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with NVIDIA and Amatheon Agri

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

The idea behind NVIDIA and Amatheon Agri Holding 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.