Correlation Between NVIDIA and Deutsche Managed

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

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

Diversification Opportunities for NVIDIA and Deutsche Managed

-0.32

Correlation Coefficient

NVIDIA  Deutsche Managed

Very good diversification

The 3 months correlation between NVIDIA and Deutsche is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding NVIDIA and Deutsche Managed Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deutsche Managed Mun 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 Deutsche Managed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deutsche Managed Mun has no effect on the direction of NVIDIA i.e., NVIDIA and Deutsche Managed go up and down completely randomly.

Pair Corralation between NVIDIA and Deutsche Managed

Given the investment horizon of 90 days NVIDIA is expected to generate 8.52 times more return on investment than Deutsche Managed. However, NVIDIA is 8.52 times more volatile than Deutsche Managed Municipal. It trades about 0.0 of its potential returns per unit of risk. Deutsche Managed Municipal is currently generating about -0.38 per unit of risk. If you would invest  14,506  in NVIDIA on October 6, 2024 and sell it today you would lose (59.00) from holding NVIDIA or give up 0.41% of portfolio value over 90 days.

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

NVIDIA  vs.  Deutsche Managed Municipal

NVIDIA

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in NVIDIA are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady fundamental indicators, NVIDIA sustained solid returns over the last few months and may actually be approaching a breakup point.

Deutsche Managed Mun

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Deutsche Managed Municipal has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Deutsche Managed is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with NVIDIA and Deutsche Managed

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

The idea behind NVIDIA and Deutsche Managed Municipal 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.