Correlation Between NVIDIA and XBP Europe
Can any of the company-specific risk be diversified away by investing in both NVIDIA and XBP Europe 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 XBP Europe into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NVIDIA and XBP Europe Holdings, you can compare the effects of market volatilities on NVIDIA and XBP Europe 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 XBP Europe. Check out your portfolio center. Please also check ongoing floating volatility patterns of NVIDIA and XBP Europe.
Diversification Opportunities for NVIDIA and XBP Europe
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between NVIDIA and XBP is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding NVIDIA and XBP Europe Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XBP Europe 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 XBP Europe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XBP Europe Holdings has no effect on the direction of NVIDIA i.e., NVIDIA and XBP Europe go up and down completely randomly.
Pair Corralation between NVIDIA and XBP Europe
Given the investment horizon of 90 days NVIDIA is expected to generate 15.65 times less return on investment than XBP Europe. But when comparing it to its historical volatility, NVIDIA is 4.87 times less risky than XBP Europe. It trades about 0.03 of its potential returns per unit of risk. XBP Europe Holdings is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 110.00 in XBP Europe Holdings on August 27, 2024 and sell it today you would earn a total of 16.00 from holding XBP Europe Holdings or generate 14.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NVIDIA vs. XBP Europe Holdings
Performance |
| Timeline |
| NVIDIA |
| XBP Europe Holdings |
NVIDIA and XBP Europe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NVIDIA and XBP Europe
The main advantage of trading using opposite NVIDIA and XBP Europe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NVIDIA position performs unexpectedly, XBP Europe 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 XBP Europe will offset losses from the drop in XBP Europe's long position.| NVIDIA vs. Intel | NVIDIA vs. Taiwan Semiconductor Manufacturing | NVIDIA vs. Marvell Technology Group | NVIDIA vs. Micron Technology |
| XBP Europe vs. GigaCloud Technology Class | XBP Europe vs. Arqit Quantum | XBP Europe vs. Telos Corp | XBP Europe vs. Cemtrex |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world |