Correlation Between NVIDIA and Hesai Group
Can any of the company-specific risk be diversified away by investing in both NVIDIA and Hesai Group 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 Hesai Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NVIDIA and Hesai Group American, you can compare the effects of market volatilities on NVIDIA and Hesai Group 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 Hesai Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of NVIDIA and Hesai Group.
Diversification Opportunities for NVIDIA and Hesai Group
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NVIDIA and Hesai is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding NVIDIA and Hesai Group American in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hesai Group American 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 Hesai Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hesai Group American has no effect on the direction of NVIDIA i.e., NVIDIA and Hesai Group go up and down completely randomly.
Pair Corralation between NVIDIA and Hesai Group
Given the investment horizon of 90 days NVIDIA is expected to generate 55.69 times less return on investment than Hesai Group. But when comparing it to its historical volatility, NVIDIA is 2.86 times less risky than Hesai Group. It trades about 0.01 of its potential returns per unit of risk. Hesai Group American is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 423.00 in Hesai Group American on November 18, 2024 and sell it today you would earn a total of 1,341 from holding Hesai Group American or generate 317.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NVIDIA vs. Hesai Group American
Performance |
| Timeline |
| NVIDIA |
| Hesai Group American |
NVIDIA and Hesai Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NVIDIA and Hesai Group
The main advantage of trading using opposite NVIDIA and Hesai Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NVIDIA position performs unexpectedly, Hesai Group 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 Hesai Group will offset losses from the drop in Hesai Group's long position.| NVIDIA vs. Intel | NVIDIA vs. Taiwan Semiconductor Manufacturing | NVIDIA vs. Marvell Technology Group | NVIDIA vs. Micron Technology |
| Hesai Group vs. Li Auto | Hesai Group vs. Aptiv PLC | Hesai Group vs. EMCOR Group | Hesai Group vs. MYR 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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