Correlation Between NVIDIA and Fobi AI
Can any of the company-specific risk be diversified away by investing in both NVIDIA and Fobi AI 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 Fobi AI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NVIDIA and Fobi AI, you can compare the effects of market volatilities on NVIDIA and Fobi AI 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 Fobi AI. Check out your portfolio center. Please also check ongoing floating volatility patterns of NVIDIA and Fobi AI.
Diversification Opportunities for NVIDIA and Fobi AI
Pay attention - limited upside
The 3 months correlation between NVIDIA and Fobi is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding NVIDIA and Fobi AI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fobi AI 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 Fobi AI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fobi AI has no effect on the direction of NVIDIA i.e., NVIDIA and Fobi AI go up and down completely randomly.
Pair Corralation between NVIDIA and Fobi AI
Given the investment horizon of 90 days NVIDIA is expected to generate 0.36 times more return on investment than Fobi AI. However, NVIDIA is 2.8 times less risky than Fobi AI. It trades about 0.13 of its potential returns per unit of risk. Fobi AI is currently generating about -0.04 per unit of risk. If you would invest 6,151 in NVIDIA on August 28, 2024 and sell it today you would earn a total of 7,451 from holding NVIDIA or generate 121.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.52% |
| Values | Daily Returns |
NVIDIA vs. Fobi AI
Performance |
| Timeline |
| NVIDIA |
| Fobi AI |
NVIDIA and Fobi AI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NVIDIA and Fobi AI
The main advantage of trading using opposite NVIDIA and Fobi AI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NVIDIA position performs unexpectedly, Fobi AI 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 Fobi AI will offset losses from the drop in Fobi AI's long position.| NVIDIA vs. Intel | NVIDIA vs. Taiwan Semiconductor Manufacturing | NVIDIA vs. Marvell Technology Group | NVIDIA vs. Micron Technology |
| Fobi AI vs. Voxtur Analytics Corp | Fobi AI vs. Fobi AI | Fobi AI vs. ThreeD Capital | Fobi AI vs. VSBLTY Groupe Technologies |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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