Correlation Between NVIDIA and Aston Martin
Can any of the company-specific risk be diversified away by investing in both NVIDIA and Aston Martin 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 Aston Martin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NVIDIA and Aston Martin Lagonda, you can compare the effects of market volatilities on NVIDIA and Aston Martin 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 Aston Martin. Check out your portfolio center. Please also check ongoing floating volatility patterns of NVIDIA and Aston Martin.
Diversification Opportunities for NVIDIA and Aston Martin
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between NVIDIA and Aston is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding NVIDIA and Aston Martin Lagonda in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aston Martin Lagonda 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 Aston Martin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aston Martin Lagonda has no effect on the direction of NVIDIA i.e., NVIDIA and Aston Martin go up and down completely randomly.
Pair Corralation between NVIDIA and Aston Martin
Given the investment horizon of 90 days NVIDIA is expected to generate 0.71 times more return on investment than Aston Martin. However, NVIDIA is 1.41 times less risky than Aston Martin. It trades about 0.0 of its potential returns per unit of risk. Aston Martin Lagonda is currently generating about -0.06 per unit of risk. If you would invest 13,934 in NVIDIA on August 31, 2024 and sell it today you would lose (109.00) from holding NVIDIA or give up 0.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NVIDIA vs. Aston Martin Lagonda
Performance |
| Timeline |
| NVIDIA |
| Aston Martin Lagonda |
NVIDIA and Aston Martin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NVIDIA and Aston Martin
The main advantage of trading using opposite NVIDIA and Aston Martin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NVIDIA position performs unexpectedly, Aston Martin 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 Aston Martin will offset losses from the drop in Aston Martin's long position.| NVIDIA vs. Intel | NVIDIA vs. Taiwan Semiconductor Manufacturing | NVIDIA vs. Marvell Technology Group | NVIDIA vs. Micron Technology |
| Aston Martin vs. Geely Automobile Holdings | Aston Martin vs. Guangzhou Automobile Group | Aston Martin vs. Dowlais Group plc | Aston Martin vs. NFI Group |
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 Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
Other Complementary Tools
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world |