Correlation Between NVIDIA CDR and Propel Holdings
Can any of the company-specific risk be diversified away by investing in both NVIDIA CDR and Propel Holdings 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 Propel Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NVIDIA CDR and Propel Holdings, you can compare the effects of market volatilities on NVIDIA CDR and Propel Holdings 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 Propel Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of NVIDIA CDR and Propel Holdings.
Diversification Opportunities for NVIDIA CDR and Propel Holdings
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between NVIDIA and Propel is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding NVIDIA CDR and Propel Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Propel Holdings 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 Propel Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Propel Holdings has no effect on the direction of NVIDIA CDR i.e., NVIDIA CDR and Propel Holdings go up and down completely randomly.
Pair Corralation between NVIDIA CDR and Propel Holdings
Assuming the 90 days trading horizon NVIDIA CDR is expected to under-perform the Propel Holdings. But the stock apears to be less risky and, when comparing its historical volatility, NVIDIA CDR is 1.35 times less risky than Propel Holdings. The stock trades about -0.05 of its potential returns per unit of risk. The Propel Holdings is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 3,480 in Propel Holdings on August 28, 2024 and sell it today you would earn a total of 251.00 from holding Propel Holdings or generate 7.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
NVIDIA CDR vs. Propel Holdings
Performance |
| Timeline |
| NVIDIA CDR |
| Propel Holdings |
NVIDIA CDR and Propel Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NVIDIA CDR and Propel Holdings
The main advantage of trading using opposite NVIDIA CDR and Propel Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NVIDIA CDR position performs unexpectedly, Propel Holdings 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 Propel Holdings will offset losses from the drop in Propel Holdings' long position.| NVIDIA CDR vs. Birchtech Corp | NVIDIA CDR vs. Evertz Technologies Limited | NVIDIA CDR vs. Diamond Estates Wines | NVIDIA CDR vs. Lion One Metals |
| Propel Holdings vs. Sangoma Technologies Corp | Propel Holdings vs. Vitalhub Corp | Propel Holdings vs. Converge Technology Solutions |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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