Correlation Between NVIDIA and Silver Wolf

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

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

Diversification Opportunities for NVIDIA and Silver Wolf

0.35

Correlation Coefficient

NVIDIA  Silver Wolf

Weak diversification

The 3 months correlation between NVIDIA and Silver is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding NVIDIA and Silver Wolf Exploration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silver Wolf Exploration 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 Silver Wolf. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silver Wolf Exploration has no effect on the direction of NVIDIA i.e., NVIDIA and Silver Wolf go up and down completely randomly.

Pair Corralation between NVIDIA and Silver Wolf

Given the investment horizon of 90 days NVIDIA is expected to generate 0.34 times more return on investment than Silver Wolf. However, NVIDIA is 2.92 times less risky than Silver Wolf. It trades about -0.01 of its potential returns per unit of risk. Silver Wolf Exploration is currently generating about -0.04 per unit of risk. If you would invest  13,824  in NVIDIA on November 28, 2024 and sell it today you would lose (672.00) from holding NVIDIA or give up 4.86% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.16%
Values	Daily Returns

NVIDIA  vs.  Silver Wolf Exploration

NVIDIA

Risk-Adjusted Performance

Very Weak

Over the last 90 days NVIDIA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental indicators, NVIDIA is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Silver Wolf Exploration

Risk-Adjusted Performance

Very Weak

Over the last 90 days Silver Wolf Exploration has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's technical and fundamental indicators remain nearly stable which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with NVIDIA and Silver Wolf

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

The idea behind NVIDIA and Silver Wolf Exploration 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.