Correlation Between NVIDIA and Siltronic
Can any of the company-specific risk be diversified away by investing in both NVIDIA and Siltronic 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 Siltronic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NVIDIA and Siltronic AG, you can compare the effects of market volatilities on NVIDIA and Siltronic 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 Siltronic. Check out your portfolio center. Please also check ongoing floating volatility patterns of NVIDIA and Siltronic.
Diversification Opportunities for NVIDIA and Siltronic
Pay attention - limited upside
The 3 months correlation between NVIDIA and Siltronic is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding NVIDIA and Siltronic AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siltronic AG 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 Siltronic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siltronic AG has no effect on the direction of NVIDIA i.e., NVIDIA and Siltronic go up and down completely randomly.
Pair Corralation between NVIDIA and Siltronic
Assuming the 90 days trading horizon NVIDIA is expected to generate 1.35 times more return on investment than Siltronic. However, NVIDIA is 1.35 times more volatile than Siltronic AG. It trades about 0.15 of its potential returns per unit of risk. Siltronic AG is currently generating about -0.03 per unit of risk. If you would invest 1,718 in NVIDIA on September 3, 2024 and sell it today you would earn a total of 11,388 from holding NVIDIA or generate 662.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NVIDIA vs. Siltronic AG
Performance |
| Timeline |
| NVIDIA |
| Siltronic AG |
NVIDIA and Siltronic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NVIDIA and Siltronic
The main advantage of trading using opposite NVIDIA and Siltronic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NVIDIA position performs unexpectedly, Siltronic 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 Siltronic will offset losses from the drop in Siltronic's long position.| NVIDIA vs. Lion One Metals | NVIDIA vs. LION ONE METALS | NVIDIA vs. NISSAN CHEMICAL IND | NVIDIA vs. X FAB Silicon Foundries |
| Siltronic vs. NVIDIA | Siltronic vs. Taiwan Semiconductor Manufacturing | Siltronic vs. Advanced Micro Devices | Siltronic vs. Intel |
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 Stocks Directory module to find actively traded stocks across global markets.
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