Correlation Between NVIDIA and KALRAY SA
Can any of the company-specific risk be diversified away by investing in both NVIDIA and KALRAY SA 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 NVIDIA and KALRAY SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NVIDIA and KALRAY SA EO, you can compare the effects of market volatilities on NVIDIA and KALRAY SA 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 NVIDIA with a short position of KALRAY SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of NVIDIA and KALRAY SA.
Diversification Opportunities for NVIDIA and KALRAY SA
Pay attention - limited upside
The 3 months correlation between NVIDIA and KALRAY is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding NVIDIA and KALRAY SA EO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KALRAY SA EO and NVIDIA 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 NVIDIA are associated (or correlated) with KALRAY SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KALRAY SA EO has no effect on the direction of NVIDIA i.e., NVIDIA and KALRAY SA go up and down completely randomly.
Pair Corralation between NVIDIA and KALRAY SA
Assuming the 90 days horizon NVIDIA is expected to generate 0.31 times more return on investment than KALRAY SA. However, NVIDIA is 3.2 times less risky than KALRAY SA. It trades about -0.03 of its potential returns per unit of risk. KALRAY SA EO is currently generating about -0.18 per unit of risk. If you would invest 13,112 in NVIDIA on October 9, 2024 and sell it today you would lose (158.00) from holding NVIDIA or give up 1.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 87.5% |
| Values | Daily Returns |
NVIDIA vs. KALRAY SA EO
Performance |
| Timeline |
| NVIDIA |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Insignificant
| KALRAY SA EO |
NVIDIA and KALRAY SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NVIDIA and KALRAY SA
The main advantage of trading using opposite NVIDIA and KALRAY SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NVIDIA position performs unexpectedly, KALRAY SA 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 KALRAY SA will offset losses from the drop in KALRAY SA's long position.The idea behind NVIDIA and KALRAY SA EO 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.| KALRAY SA vs. NISSAN CHEMICAL IND | KALRAY SA vs. CHEMICAL INDUSTRIES | KALRAY SA vs. Sekisui Chemical Co | KALRAY SA vs. AUTO TRADER ADR |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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