Correlation Between NVIDIA and White Gold
Can any of the company-specific risk be diversified away by investing in both NVIDIA and White Gold 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 White Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NVIDIA and White Gold Corp, you can compare the effects of market volatilities on NVIDIA and White Gold 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 White Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of NVIDIA and White Gold.
Diversification Opportunities for NVIDIA and White Gold
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NVIDIA and White is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding NVIDIA and White Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on White Gold Corp 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 White Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of White Gold Corp has no effect on the direction of NVIDIA i.e., NVIDIA and White Gold go up and down completely randomly.
Pair Corralation between NVIDIA and White Gold
Given the investment horizon of 90 days NVIDIA is expected to generate 0.61 times more return on investment than White Gold. However, NVIDIA is 1.64 times less risky than White Gold. It trades about 0.12 of its potential returns per unit of risk. White Gold Corp is currently generating about 0.01 per unit of risk. If you would invest 2,417 in NVIDIA on November 27, 2024 and sell it today you would earn a total of 10,286 from holding NVIDIA or generate 425.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
NVIDIA vs. White Gold Corp
Performance |
| Timeline |
| NVIDIA |
| White Gold Corp |
NVIDIA and White Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NVIDIA and White Gold
The main advantage of trading using opposite NVIDIA and White Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NVIDIA position performs unexpectedly, White Gold 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 White Gold will offset losses from the drop in White Gold's long position.| NVIDIA vs. Intel | NVIDIA vs. Taiwan Semiconductor Manufacturing | NVIDIA vs. Marvell Technology Group | NVIDIA vs. Micron Technology |
| White Gold vs. Puma Exploration | White Gold vs. Endurance Gold | White Gold vs. Grande Portage Resources | White Gold vs. Altamira Gold Corp |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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