Correlation Between NVIDIA and Stratasys
Can any of the company-specific risk be diversified away by investing in both NVIDIA and Stratasys 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 Stratasys into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NVIDIA and Stratasys, you can compare the effects of market volatilities on NVIDIA and Stratasys 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 Stratasys. Check out your portfolio center. Please also check ongoing floating volatility patterns of NVIDIA and Stratasys.
Diversification Opportunities for NVIDIA and Stratasys
Poor diversification
The 3 months correlation between NVIDIA and Stratasys is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding NVIDIA and Stratasys in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stratasys 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 Stratasys. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stratasys has no effect on the direction of NVIDIA i.e., NVIDIA and Stratasys go up and down completely randomly.
Pair Corralation between NVIDIA and Stratasys
Given the investment horizon of 90 days NVIDIA is expected to under-perform the Stratasys. But the stock apears to be less risky and, when comparing its historical volatility, NVIDIA is 2.46 times less risky than Stratasys. The stock trades about -0.05 of its potential returns per unit of risk. The Stratasys is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 770.00 in Stratasys on August 28, 2024 and sell it today you would earn a total of 206.00 from holding Stratasys or generate 26.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NVIDIA vs. Stratasys
Performance |
| Timeline |
| NVIDIA |
| Stratasys |
NVIDIA and Stratasys Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NVIDIA and Stratasys
The main advantage of trading using opposite NVIDIA and Stratasys positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NVIDIA position performs unexpectedly, Stratasys 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 Stratasys will offset losses from the drop in Stratasys' long position.| NVIDIA vs. Intel | NVIDIA vs. Taiwan Semiconductor Manufacturing | NVIDIA vs. Marvell Technology Group | NVIDIA vs. Micron Technology |
| Stratasys vs. D Wave Quantum | Stratasys vs. Rigetti Computing | Stratasys vs. Cricut Inc | Stratasys vs. Quantum Computing |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
Other Complementary Tools
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators |