Correlation Between Intel Corp and NVIDIA
Can any of the company-specific risk be diversified away by investing in both Intel Corp and NVIDIA 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 Intel Corp and NVIDIA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intel Corp CEDEAR and NVIDIA, you can compare the effects of market volatilities on Intel Corp 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 Intel Corp with a short position of NVIDIA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intel Corp and NVIDIA.
Diversification Opportunities for Intel Corp and NVIDIA
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Intel and NVIDIA is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Intel Corp CEDEAR and NVIDIA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NVIDIA and Intel Corp 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 Intel Corp CEDEAR 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 has no effect on the direction of Intel Corp i.e., Intel Corp and NVIDIA go up and down completely randomly.
Pair Corralation between Intel Corp and NVIDIA
Assuming the 90 days trading horizon Intel Corp CEDEAR is expected to under-perform the NVIDIA. In addition to that, Intel Corp is 1.26 times more volatile than NVIDIA. It trades about -0.04 of its total potential returns per unit of risk. NVIDIA is currently generating about 0.01 per unit of volatility. If you would invest 666,770 in NVIDIA on September 3, 2024 and sell it today you would lose (34,770) from holding NVIDIA or give up 5.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Intel Corp CEDEAR vs. NVIDIA
Performance |
| Timeline |
| Intel Corp CEDEAR |
| NVIDIA |
Intel Corp and NVIDIA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intel Corp and NVIDIA
The main advantage of trading using opposite Intel Corp and NVIDIA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intel Corp 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.| Intel Corp vs. Transportadora de Gas | Intel Corp vs. Compania de Transporte | Intel Corp vs. Agrometal SAI | Intel Corp vs. Harmony Gold Mining |
| NVIDIA vs. Intel Corp CEDEAR | NVIDIA vs. Edesa Holding SA | NVIDIA vs. Longvie SA | NVIDIA vs. American Express Co |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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