Correlation Between Canaf Investments and NVIDIA CDR
Can any of the company-specific risk be diversified away by investing in both Canaf Investments 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 Canaf Investments and NVIDIA CDR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Canaf Investments and NVIDIA CDR, you can compare the effects of market volatilities on Canaf Investments 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 Canaf Investments with a short position of NVIDIA CDR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canaf Investments and NVIDIA CDR.
Diversification Opportunities for Canaf Investments and NVIDIA CDR
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Canaf and NVIDIA is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Canaf Investments and NVIDIA CDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NVIDIA CDR and Canaf Investments 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 Canaf Investments 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 Canaf Investments i.e., Canaf Investments and NVIDIA CDR go up and down completely randomly.
Pair Corralation between Canaf Investments and NVIDIA CDR
Assuming the 90 days horizon Canaf Investments is expected to under-perform the NVIDIA CDR. In addition to that, Canaf Investments is 1.26 times more volatile than NVIDIA CDR. It trades about -0.09 of its total potential returns per unit of risk. NVIDIA CDR is currently generating about 0.03 per unit of volatility. If you would invest 3,297 in NVIDIA CDR on August 27, 2024 and sell it today you would earn a total of 26.00 from holding NVIDIA CDR or generate 0.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Canaf Investments vs. NVIDIA CDR
Performance |
| Timeline |
| Canaf Investments |
| NVIDIA CDR |
Canaf Investments and NVIDIA CDR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canaf Investments and NVIDIA CDR
The main advantage of trading using opposite Canaf Investments and NVIDIA CDR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canaf Investments 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.| Canaf Investments vs. First Majestic Silver | Canaf Investments vs. Ivanhoe Energy | Canaf Investments vs. Orezone Gold Corp | Canaf Investments vs. Faraday Copper Corp |
| NVIDIA CDR vs. Bausch Health Companies | NVIDIA CDR vs. Data Communications Management | NVIDIA CDR vs. NeXGold Mining Corp | NVIDIA CDR vs. Marimaca Copper Corp |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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