Correlation Between Till Capital and NVIDIA CDR

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

By analyzing existing cross correlation between Till Capital and NVIDIA CDR, you can compare the effects of market volatilities on Till Capital and NVIDIA CDR 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 Till Capital with a short position of NVIDIA CDR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Till Capital and NVIDIA CDR.

Diversification Opportunities for Till Capital and NVIDIA CDR

0.66

Correlation Coefficient

Till Capital  NVIDIA CDR

Poor diversification

The 3 months correlation between Till and NVIDIA is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Till Capital and NVIDIA CDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NVIDIA CDR and Till Capital 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 Till Capital are associated (or correlated) with NVIDIA CDR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NVIDIA CDR has no effect on the direction of Till Capital i.e., Till Capital and NVIDIA CDR go up and down completely randomly.

Pair Corralation between Till Capital and NVIDIA CDR

Assuming the 90 days horizon Till Capital is expected to generate 0.15 times more return on investment than NVIDIA CDR. However, Till Capital is 6.86 times less risky than NVIDIA CDR. It trades about -0.1 of its potential returns per unit of risk. NVIDIA CDR is currently generating about -0.07 per unit of risk. If you would invest  106.00  in Till Capital on December 29, 2024 and sell it today you would lose (4.00) from holding Till Capital or give up 3.77% of portfolio value over 90 days.

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

Till Capital  vs.  NVIDIA CDR

Till Capital

Risk-Adjusted Performance

Very Weak

Over the last 90 days Till Capital has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Till Capital is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

NVIDIA CDR

Risk-Adjusted Performance

Very Weak

Over the last 90 days NVIDIA CDR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Till Capital and NVIDIA CDR

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

The idea behind Till Capital and NVIDIA CDR 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.