Correlation Between NVIDIA and Barclays Capital
Can any of the company-specific risk be diversified away by investing in both NVIDIA and Barclays Capital 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 Barclays Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NVIDIA and Barclays Capital, you can compare the effects of market volatilities on NVIDIA and Barclays Capital 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 Barclays Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of NVIDIA and Barclays Capital.
Diversification Opportunities for NVIDIA and Barclays Capital
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between NVIDIA and Barclays is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding NVIDIA and Barclays Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barclays Capital 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 Barclays Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barclays Capital has no effect on the direction of NVIDIA i.e., NVIDIA and Barclays Capital go up and down completely randomly.
Pair Corralation between NVIDIA and Barclays Capital
Given the investment horizon of 90 days NVIDIA is expected to generate 1.73 times more return on investment than Barclays Capital. However, NVIDIA is 1.73 times more volatile than Barclays Capital. It trades about 0.15 of its potential returns per unit of risk. Barclays Capital is currently generating about 0.01 per unit of risk. If you would invest 1,598 in NVIDIA on August 27, 2024 and sell it today you would earn a total of 12,597 from holding NVIDIA or generate 788.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 31.05% |
| Values | Daily Returns |
NVIDIA vs. Barclays Capital
Performance |
| Timeline |
| NVIDIA |
| Barclays Capital |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
NVIDIA and Barclays Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NVIDIA and Barclays Capital
The main advantage of trading using opposite NVIDIA and Barclays Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NVIDIA position performs unexpectedly, Barclays Capital 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 Barclays Capital will offset losses from the drop in Barclays Capital's long position.| NVIDIA vs. Intel | NVIDIA vs. Taiwan Semiconductor Manufacturing | NVIDIA vs. Marvell Technology Group | NVIDIA vs. Micron Technology |
| Barclays Capital vs. Blackrock Muniholdings Ny | Barclays Capital vs. MFS Investment Grade | Barclays Capital vs. Eaton Vance National | Barclays Capital vs. Invesco High Income |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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