Correlation Between NVIDIA and NuGene International

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

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

Diversification Opportunities for NVIDIA and NuGene International

0.07

Correlation Coefficient

NVIDIA  NuGene International

Significant diversification

The 3 months correlation between NVIDIA and NuGene is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding NVIDIA and NuGene International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NuGene International 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 NuGene International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NuGene International has no effect on the direction of NVIDIA i.e., NVIDIA and NuGene International go up and down completely randomly.

Pair Corralation between NVIDIA and NuGene International

Given the investment horizon of 90 days NVIDIA is expected to generate 10.16 times less return on investment than NuGene International. But when comparing it to its historical volatility, NVIDIA is 7.5 times less risky than NuGene International. It trades about 0.04 of its potential returns per unit of risk. NuGene International is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  0.60  in NuGene International on October 26, 2024 and sell it today you would lose (0.20) from holding NuGene International or give up 33.33% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

NVIDIA  vs.  NuGene International

NVIDIA

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in NVIDIA are ranked lower than 3 (%) 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.

NuGene International

Risk-Adjusted Performance

4 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in NuGene International are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very weak technical and fundamental indicators, NuGene International displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with NVIDIA and NuGene International

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

The idea behind NVIDIA and NuGene International 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.