Correlation Between NVIDIA and SAIHEAT
Can any of the company-specific risk be diversified away by investing in both NVIDIA and SAIHEAT 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 SAIHEAT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NVIDIA and SAIHEAT Limited, you can compare the effects of market volatilities on NVIDIA and SAIHEAT 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 SAIHEAT. Check out your portfolio center. Please also check ongoing floating volatility patterns of NVIDIA and SAIHEAT.
Diversification Opportunities for NVIDIA and SAIHEAT
Poor diversification
The 3 months correlation between NVIDIA and SAIHEAT is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding NVIDIA and SAIHEAT Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SAIHEAT Limited 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 SAIHEAT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SAIHEAT Limited has no effect on the direction of NVIDIA i.e., NVIDIA and SAIHEAT go up and down completely randomly.
Pair Corralation between NVIDIA and SAIHEAT
Given the investment horizon of 90 days NVIDIA is expected to generate 8.58 times less return on investment than SAIHEAT. But when comparing it to its historical volatility, NVIDIA is 8.55 times less risky than SAIHEAT. It trades about 0.15 of its potential returns per unit of risk. SAIHEAT Limited is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 4.00 in SAIHEAT Limited on August 26, 2024 and sell it today you would earn a total of 11.00 from holding SAIHEAT Limited or generate 275.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 42.17% |
| Values | Daily Returns |
NVIDIA vs. SAIHEAT Limited
Performance |
| Timeline |
| NVIDIA |
| SAIHEAT Limited |
NVIDIA and SAIHEAT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NVIDIA and SAIHEAT
The main advantage of trading using opposite NVIDIA and SAIHEAT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NVIDIA position performs unexpectedly, SAIHEAT 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 SAIHEAT will offset losses from the drop in SAIHEAT's long position.| NVIDIA vs. Intel | NVIDIA vs. Taiwan Semiconductor Manufacturing | NVIDIA vs. Marvell Technology Group | NVIDIA vs. Micron Technology |
| SAIHEAT vs. Kandi Technologies Group | SAIHEAT vs. Grupo Televisa SAB | SAIHEAT vs. Xponential Fitness | SAIHEAT vs. Lipocine |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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