Correlation Between NVIDIA and YTLBerhad

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

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

Diversification Opportunities for NVIDIA and YTLBerhad

0.69

Correlation Coefficient

NVIDIA  YTLBerhad

Poor diversification

The 3 months correlation between NVIDIA and YTLBerhad is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding NVIDIA and YTL Berhad in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YTL Berhad 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 YTLBerhad. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of YTL Berhad has no effect on the direction of NVIDIA i.e., NVIDIA and YTLBerhad go up and down completely randomly.

Pair Corralation between NVIDIA and YTLBerhad

Given the investment horizon of 90 days NVIDIA is expected to under-perform the YTLBerhad. In addition to that, NVIDIA is 5.15 times more volatile than YTL Berhad. It trades about -0.07 of its total potential returns per unit of risk. YTL Berhad is currently generating about -0.16 per unit of volatility. If you would invest  50.00  in YTL Berhad on December 30, 2024 and sell it today you would lose (4.00) from holding YTL Berhad or give up 8.0% of portfolio value over 90 days.

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

NVIDIA  vs.  YTL Berhad

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 unsteady performance in the last few months, the Stock's fundamental indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

YTL Berhad

Risk-Adjusted Performance

Very Weak

Over the last 90 days YTL Berhad has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with NVIDIA and YTLBerhad

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

The idea behind NVIDIA and YTL Berhad 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.