Correlation Between NVIDIA and Vipshop Holdings
Can any of the company-specific risk be diversified away by investing in both NVIDIA and Vipshop Holdings 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 Vipshop Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NVIDIA and Vipshop Holdings Limited, you can compare the effects of market volatilities on NVIDIA and Vipshop Holdings 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 Vipshop Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of NVIDIA and Vipshop Holdings.
Diversification Opportunities for NVIDIA and Vipshop Holdings
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between NVIDIA and Vipshop is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding NVIDIA and Vipshop Holdings Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vipshop Holdings 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 Vipshop Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vipshop Holdings has no effect on the direction of NVIDIA i.e., NVIDIA and Vipshop Holdings go up and down completely randomly.
Pair Corralation between NVIDIA and Vipshop Holdings
Given the investment horizon of 90 days NVIDIA is expected to generate 1.09 times more return on investment than Vipshop Holdings. However, NVIDIA is 1.09 times more volatile than Vipshop Holdings Limited. It trades about 0.04 of its potential returns per unit of risk. Vipshop Holdings Limited is currently generating about -0.06 per unit of risk. If you would invest 14,359 in NVIDIA on August 23, 2024 and sell it today you would earn a total of 230.00 from holding NVIDIA or generate 1.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NVIDIA vs. Vipshop Holdings Limited
Performance |
| Timeline |
| NVIDIA |
| Vipshop Holdings |
NVIDIA and Vipshop Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NVIDIA and Vipshop Holdings
The main advantage of trading using opposite NVIDIA and Vipshop Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NVIDIA position performs unexpectedly, Vipshop Holdings 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 Vipshop Holdings will offset losses from the drop in Vipshop Holdings' long position.| NVIDIA vs. Intel | NVIDIA vs. Taiwan Semiconductor Manufacturing | NVIDIA vs. Marvell Technology Group | NVIDIA vs. Micron Technology |
| Vipshop Holdings vs. JD Inc Adr | Vipshop Holdings vs. Alibaba Group Holding | Vipshop Holdings vs. Sea | Vipshop Holdings vs. Jumia Technologies AG |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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