Correlation Between NVIDIA and Cathay Pacific
Can any of the company-specific risk be diversified away by investing in both NVIDIA and Cathay Pacific 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 Cathay Pacific into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NVIDIA and Cathay Pacific Airways, you can compare the effects of market volatilities on NVIDIA and Cathay Pacific 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 Cathay Pacific. Check out your portfolio center. Please also check ongoing floating volatility patterns of NVIDIA and Cathay Pacific.
Diversification Opportunities for NVIDIA and Cathay Pacific
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between NVIDIA and Cathay is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding NVIDIA and Cathay Pacific Airways in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cathay Pacific Airways 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 Cathay Pacific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cathay Pacific Airways has no effect on the direction of NVIDIA i.e., NVIDIA and Cathay Pacific go up and down completely randomly.
Pair Corralation between NVIDIA and Cathay Pacific
If you would invest 13,276 in NVIDIA on September 1, 2024 and sell it today you would earn a total of 549.00 from holding NVIDIA or generate 4.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
NVIDIA vs. Cathay Pacific Airways
Performance |
| Timeline |
| NVIDIA |
| Cathay Pacific Airways |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
NVIDIA and Cathay Pacific Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NVIDIA and Cathay Pacific
The main advantage of trading using opposite NVIDIA and Cathay Pacific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NVIDIA position performs unexpectedly, Cathay Pacific 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 Cathay Pacific will offset losses from the drop in Cathay Pacific's long position.| NVIDIA vs. Intel | NVIDIA vs. Taiwan Semiconductor Manufacturing | NVIDIA vs. Marvell Technology Group | NVIDIA vs. Micron Technology |
| Cathay Pacific vs. Finnair Oyj | Cathay Pacific vs. easyJet plc | Cathay Pacific vs. Norse Atlantic ASA | Cathay Pacific vs. Air New Zealand |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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