Correlation Between NVIDIA CDR and Lion Electric
Can any of the company-specific risk be diversified away by investing in both NVIDIA CDR and Lion Electric 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 CDR and Lion Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NVIDIA CDR and Lion Electric Corp, you can compare the effects of market volatilities on NVIDIA CDR and Lion Electric 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 CDR with a short position of Lion Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of NVIDIA CDR and Lion Electric.
Diversification Opportunities for NVIDIA CDR and Lion Electric
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between NVIDIA and Lion is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding NVIDIA CDR and Lion Electric Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lion Electric Corp and NVIDIA CDR 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 CDR are associated (or correlated) with Lion Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lion Electric Corp has no effect on the direction of NVIDIA CDR i.e., NVIDIA CDR and Lion Electric go up and down completely randomly.
Pair Corralation between NVIDIA CDR and Lion Electric
Assuming the 90 days trading horizon NVIDIA CDR is expected to generate 0.23 times more return on investment than Lion Electric. However, NVIDIA CDR is 4.39 times less risky than Lion Electric. It trades about -0.06 of its potential returns per unit of risk. Lion Electric Corp is currently generating about -0.38 per unit of risk. If you would invest 3,297 in NVIDIA CDR on August 29, 2024 and sell it today you would lose (129.00) from holding NVIDIA CDR or give up 3.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NVIDIA CDR vs. Lion Electric Corp
Performance |
| Timeline |
| NVIDIA CDR |
| Lion Electric Corp |
NVIDIA CDR and Lion Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NVIDIA CDR and Lion Electric
The main advantage of trading using opposite NVIDIA CDR and Lion Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NVIDIA CDR position performs unexpectedly, Lion Electric 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 Lion Electric will offset losses from the drop in Lion Electric's long position.| NVIDIA CDR vs. Goodfood Market Corp | NVIDIA CDR vs. Precision Drilling | NVIDIA CDR vs. Storage Vault Canada | NVIDIA CDR vs. A W FOOD |
| Lion Electric vs. Lion Electric Corp | Lion Electric vs. Alimentation Couchen Tard | Lion Electric vs. BRP Inc |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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