Correlation Between Amedeo Air and NVIDIA Corp

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Can any of the company-specific risk be diversified away by investing in both Amedeo Air and NVIDIA Corp 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 Amedeo Air and NVIDIA Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amedeo Air Four and NVIDIA Corp, you can compare the effects of market volatilities on Amedeo Air and NVIDIA Corp 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 Amedeo Air with a short position of NVIDIA Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amedeo Air and NVIDIA Corp.

Diversification Opportunities for Amedeo Air and NVIDIA Corp

0.34
  Correlation Coefficient

Weak diversification

The 3 months correlation between Amedeo and NVIDIA is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Amedeo Air Four and NVIDIA Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NVIDIA Corp and Amedeo Air 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 Amedeo Air Four are associated (or correlated) with NVIDIA Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NVIDIA Corp has no effect on the direction of Amedeo Air i.e., Amedeo Air and NVIDIA Corp go up and down completely randomly.

Pair Corralation between Amedeo Air and NVIDIA Corp

Assuming the 90 days trading horizon Amedeo Air is expected to generate 17.78 times less return on investment than NVIDIA Corp. But when comparing it to its historical volatility, Amedeo Air Four is 30.32 times less risky than NVIDIA Corp. It trades about 0.09 of its potential returns per unit of risk. NVIDIA Corp is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  1,508  in NVIDIA Corp on September 12, 2024 and sell it today you would earn a total of  12,288  from holding NVIDIA Corp or generate 814.85% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy99.4%
ValuesDaily Returns

Amedeo Air Four  vs.  NVIDIA Corp

 Performance 
       Timeline  
Amedeo Air Four 

Risk-Adjusted Performance

18 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Amedeo Air Four are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Amedeo Air may actually be approaching a critical reversion point that can send shares even higher in January 2025.
NVIDIA Corp 

Risk-Adjusted Performance

8 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in NVIDIA Corp are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, NVIDIA Corp unveiled solid returns over the last few months and may actually be approaching a breakup point.

Amedeo Air and NVIDIA Corp Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Amedeo Air and NVIDIA Corp

The main advantage of trading using opposite Amedeo Air and NVIDIA Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amedeo Air position performs unexpectedly, NVIDIA Corp 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 Corp will offset losses from the drop in NVIDIA Corp's long position.
The idea behind Amedeo Air Four and NVIDIA Corp 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.

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