Correlation Between NVIDIA and Petrokent Turizm

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

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

Diversification Opportunities for NVIDIA and Petrokent Turizm

-0.04

Correlation Coefficient

NVIDIA  Petrokent Turizm

Good diversification

The 3 months correlation between NVIDIA and Petrokent is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding NVIDIA and Petrokent Turizm AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Petrokent Turizm 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 Petrokent Turizm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Petrokent Turizm has no effect on the direction of NVIDIA i.e., NVIDIA and Petrokent Turizm go up and down completely randomly.

Pair Corralation between NVIDIA and Petrokent Turizm

Given the investment horizon of 90 days NVIDIA is expected to generate 1.62 times less return on investment than Petrokent Turizm. But when comparing it to its historical volatility, NVIDIA is 1.25 times less risky than Petrokent Turizm. It trades about 0.08 of its potential returns per unit of risk. Petrokent Turizm AS is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  22,300  in Petrokent Turizm AS on October 4, 2024 and sell it today you would earn a total of  4,100  from holding Petrokent Turizm AS or generate 18.39% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

NVIDIA  vs.  Petrokent Turizm AS

NVIDIA

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in NVIDIA are ranked lower than 6 (%) 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.

Petrokent Turizm

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Petrokent Turizm AS are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent forward indicators, Petrokent Turizm demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with NVIDIA and Petrokent Turizm

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

The idea behind NVIDIA and Petrokent Turizm AS 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.