Correlation Between NVIDIA and Wisekey International
Can any of the company-specific risk be diversified away by investing in both NVIDIA and Wisekey International 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 Wisekey International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NVIDIA and Wisekey International Holding, you can compare the effects of market volatilities on NVIDIA and Wisekey International 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 Wisekey International. Check out your portfolio center. Please also check ongoing floating volatility patterns of NVIDIA and Wisekey International.
Diversification Opportunities for NVIDIA and Wisekey International
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between NVIDIA and Wisekey is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding NVIDIA and Wisekey International Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wisekey International 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 Wisekey International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wisekey International has no effect on the direction of NVIDIA i.e., NVIDIA and Wisekey International go up and down completely randomly.
Pair Corralation between NVIDIA and Wisekey International
Given the investment horizon of 90 days NVIDIA is expected to generate 0.34 times more return on investment than Wisekey International. However, NVIDIA is 2.95 times less risky than Wisekey International. It trades about 0.14 of its potential returns per unit of risk. Wisekey International Holding is currently generating about 0.05 per unit of risk. If you would invest 1,915 in NVIDIA on September 19, 2024 and sell it today you would earn a total of 11,124 from holding NVIDIA or generate 580.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NVIDIA vs. Wisekey International Holding
Performance |
| Timeline |
| NVIDIA |
| Wisekey International |
NVIDIA and Wisekey International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NVIDIA and Wisekey International
The main advantage of trading using opposite NVIDIA and Wisekey International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NVIDIA position performs unexpectedly, Wisekey International 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 Wisekey International will offset losses from the drop in Wisekey International's long position.The idea behind NVIDIA and Wisekey International Holding pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Wisekey International vs. OppFi Inc | Wisekey International vs. CS Disco LLC | Wisekey International vs. ON24 Inc | Wisekey International vs. Amplitude |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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