Correlation Between Advanced Micro and NVIDIA
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By analyzing existing cross correlation between Advanced Micro Devices and NVIDIA PORATION, you can compare the effects of market volatilities on Advanced Micro and NVIDIA 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 Advanced Micro with a short position of NVIDIA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advanced Micro and NVIDIA.
Diversification Opportunities for Advanced Micro and NVIDIA
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Advanced and NVIDIA is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Advanced Micro Devices and NVIDIA PORATION in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NVIDIA PORATION and Advanced Micro 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 Advanced Micro Devices are associated (or correlated) with NVIDIA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NVIDIA PORATION has no effect on the direction of Advanced Micro i.e., Advanced Micro and NVIDIA go up and down completely randomly.
Pair Corralation between Advanced Micro and NVIDIA
Considering the 90-day investment horizon Advanced Micro Devices is expected to under-perform the NVIDIA. In addition to that, Advanced Micro is 2.23 times more volatile than NVIDIA PORATION. It trades about -0.2 of its total potential returns per unit of risk. NVIDIA PORATION is currently generating about -0.03 per unit of volatility. If you would invest 8,598 in NVIDIA PORATION on August 31, 2024 and sell it today you would lose (53.00) from holding NVIDIA PORATION or give up 0.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Advanced Micro Devices vs. NVIDIA PORATION
Performance |
| Timeline |
| Advanced Micro Devices |
| NVIDIA PORATION |
Advanced Micro and NVIDIA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advanced Micro and NVIDIA
The main advantage of trading using opposite Advanced Micro and NVIDIA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advanced Micro position performs unexpectedly, NVIDIA 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 will offset losses from the drop in NVIDIA's long position.| Advanced Micro vs. Taiwan Semiconductor Manufacturing | Advanced Micro vs. Intel | Advanced Micro vs. Marvell Technology Group | Advanced Micro vs. Micron Technology |
| NVIDIA vs. Kulicke and Soffa | NVIDIA vs. Weibo Corp | NVIDIA vs. Elmos Semiconductor SE | NVIDIA vs. Advanced Micro Devices |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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