Correlation Between NVIDIA CDR and Stantec
Can any of the company-specific risk be diversified away by investing in both NVIDIA CDR and Stantec 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 Stantec into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NVIDIA CDR and Stantec, you can compare the effects of market volatilities on NVIDIA CDR and Stantec 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 Stantec. Check out your portfolio center. Please also check ongoing floating volatility patterns of NVIDIA CDR and Stantec.
Diversification Opportunities for NVIDIA CDR and Stantec
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between NVIDIA and Stantec is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding NVIDIA CDR and Stantec in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stantec 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 Stantec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stantec has no effect on the direction of NVIDIA CDR i.e., NVIDIA CDR and Stantec go up and down completely randomly.
Pair Corralation between NVIDIA CDR and Stantec
Assuming the 90 days trading horizon NVIDIA CDR is expected to generate 4.45 times less return on investment than Stantec. In addition to that, NVIDIA CDR is 1.6 times more volatile than Stantec. It trades about 0.03 of its total potential returns per unit of risk. Stantec is currently generating about 0.19 per unit of volatility. If you would invest 11,480 in Stantec on August 27, 2024 and sell it today you would earn a total of 681.00 from holding Stantec or generate 5.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
NVIDIA CDR vs. Stantec
Performance |
| Timeline |
| NVIDIA CDR |
| Stantec |
NVIDIA CDR and Stantec Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NVIDIA CDR and Stantec
The main advantage of trading using opposite NVIDIA CDR and Stantec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NVIDIA CDR position performs unexpectedly, Stantec 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 Stantec will offset losses from the drop in Stantec's long position.| NVIDIA CDR vs. Bausch Health Companies | NVIDIA CDR vs. Data Communications Management | NVIDIA CDR vs. NeXGold Mining Corp | NVIDIA CDR vs. Marimaca Copper Corp |
| Stantec vs. Toromont Industries | Stantec vs. WSP Global | Stantec vs. Ritchie Bros Auctioneers | Stantec vs. Stella Jones |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
Other Complementary Tools
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data |