Correlation Between NVIDIA and Vaccinex
Can any of the company-specific risk be diversified away by investing in both NVIDIA and Vaccinex 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 Vaccinex into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NVIDIA and Vaccinex, you can compare the effects of market volatilities on NVIDIA and Vaccinex 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 Vaccinex. Check out your portfolio center. Please also check ongoing floating volatility patterns of NVIDIA and Vaccinex.
Diversification Opportunities for NVIDIA and Vaccinex
Excellent diversification
The 3 months correlation between NVIDIA and Vaccinex is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding NVIDIA and Vaccinex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vaccinex 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 Vaccinex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vaccinex has no effect on the direction of NVIDIA i.e., NVIDIA and Vaccinex go up and down completely randomly.
Pair Corralation between NVIDIA and Vaccinex
Given the investment horizon of 90 days NVIDIA is expected to generate 3.88 times less return on investment than Vaccinex. But when comparing it to its historical volatility, NVIDIA is 3.77 times less risky than Vaccinex. It trades about 0.03 of its potential returns per unit of risk. Vaccinex is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 374.00 in Vaccinex on August 27, 2024 and sell it today you would lose (12.00) from holding Vaccinex or give up 3.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NVIDIA vs. Vaccinex
Performance |
| Timeline |
| NVIDIA |
| Vaccinex |
NVIDIA and Vaccinex Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NVIDIA and Vaccinex
The main advantage of trading using opposite NVIDIA and Vaccinex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NVIDIA position performs unexpectedly, Vaccinex 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 Vaccinex will offset losses from the drop in Vaccinex's long position.| NVIDIA vs. Intel | NVIDIA vs. Taiwan Semiconductor Manufacturing | NVIDIA vs. Marvell Technology Group | NVIDIA vs. Micron Technology |
| Vaccinex vs. Protara Therapeutics | Vaccinex vs. Monopar Therapeutics | Vaccinex vs. Surrozen | Vaccinex vs. Salarius Pharmaceuticals |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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