Correlation Between NVIDIA CDR and Sun Life
Can any of the company-specific risk be diversified away by investing in both NVIDIA CDR and Sun Life 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 Sun Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NVIDIA CDR and Sun Life Financial, you can compare the effects of market volatilities on NVIDIA CDR and Sun Life 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 Sun Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of NVIDIA CDR and Sun Life.
Diversification Opportunities for NVIDIA CDR and Sun Life
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between NVIDIA and Sun is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding NVIDIA CDR and Sun Life Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sun Life Financial 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 Sun Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sun Life Financial has no effect on the direction of NVIDIA CDR i.e., NVIDIA CDR and Sun Life go up and down completely randomly.
Pair Corralation between NVIDIA CDR and Sun Life
Assuming the 90 days trading horizon NVIDIA CDR is expected to generate 4.11 times more return on investment than Sun Life. However, NVIDIA CDR is 4.11 times more volatile than Sun Life Financial. It trades about 0.15 of its potential returns per unit of risk. Sun Life Financial is currently generating about 0.05 per unit of risk. If you would invest 411.00 in NVIDIA CDR on August 30, 2024 and sell it today you would earn a total of 2,757 from holding NVIDIA CDR or generate 670.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NVIDIA CDR vs. Sun Life Financial
Performance |
| Timeline |
| NVIDIA CDR |
| Sun Life Financial |
NVIDIA CDR and Sun Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NVIDIA CDR and Sun Life
The main advantage of trading using opposite NVIDIA CDR and Sun Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NVIDIA CDR position performs unexpectedly, Sun Life 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 Sun Life will offset losses from the drop in Sun Life'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 |
| Sun Life vs. Sun Life Financial | Sun Life vs. Sun Life Financial | Sun Life vs. Sun Lif Non | Sun Life vs. iA Financial |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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