Correlation Between NVIDIA and SSC Security

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both NVIDIA and SSC Security 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 SSC Security into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NVIDIA and SSC Security Services, you can compare the effects of market volatilities on NVIDIA and SSC Security 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 SSC Security. Check out your portfolio center. Please also check ongoing floating volatility patterns of NVIDIA and SSC Security.

Diversification Opportunities for NVIDIA and SSC Security

0.17
  Correlation Coefficient

Average diversification

The 3 months correlation between NVIDIA and SSC is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding NVIDIA and SSC Security Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SSC Security Services 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 SSC Security. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SSC Security Services has no effect on the direction of NVIDIA i.e., NVIDIA and SSC Security go up and down completely randomly.

Pair Corralation between NVIDIA and SSC Security

Given the investment horizon of 90 days NVIDIA is expected to generate 0.84 times more return on investment than SSC Security. However, NVIDIA is 1.2 times less risky than SSC Security. It trades about 0.15 of its potential returns per unit of risk. SSC Security Services is currently generating about 0.02 per unit of risk. If you would invest  1,769  in NVIDIA on October 5, 2024 and sell it today you would earn a total of  12,062  from holding NVIDIA or generate 681.85% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy99.8%
ValuesDaily Returns

NVIDIA  vs.  SSC Security Services

 Performance 
       Timeline  
NVIDIA 

Risk-Adjusted Performance

5 of 100

 
Weak
 
Strong
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.
SSC Security Services 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days SSC Security Services has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, SSC Security is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

NVIDIA and SSC Security Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with NVIDIA and SSC Security

The main advantage of trading using opposite NVIDIA and SSC Security positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NVIDIA position performs unexpectedly, SSC Security 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 SSC Security will offset losses from the drop in SSC Security's long position.
The idea behind NVIDIA and SSC Security Services 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.
Check out your portfolio center.
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.

Other Complementary Tools

Stock Tickers
Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites
Sync Your Broker
Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors.
Portfolio Backtesting
Avoid under-diversification and over-optimization by backtesting your portfolios
Portfolio Manager
State of the art Portfolio Manager to monitor and improve performance of your invested capital
Stock Screener
Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook.