Correlation Between NVIDIA and Xinyuan Real
Can any of the company-specific risk be diversified away by investing in both NVIDIA and Xinyuan Real 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 Xinyuan Real into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NVIDIA and Xinyuan Real Estate, you can compare the effects of market volatilities on NVIDIA and Xinyuan Real 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 Xinyuan Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of NVIDIA and Xinyuan Real.
Diversification Opportunities for NVIDIA and Xinyuan Real
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NVIDIA and Xinyuan is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding NVIDIA and Xinyuan Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xinyuan Real Estate 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 Xinyuan Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xinyuan Real Estate has no effect on the direction of NVIDIA i.e., NVIDIA and Xinyuan Real go up and down completely randomly.
Pair Corralation between NVIDIA and Xinyuan Real
Given the investment horizon of 90 days NVIDIA is expected to generate 0.67 times more return on investment than Xinyuan Real. However, NVIDIA is 1.5 times less risky than Xinyuan Real. It trades about 0.11 of its potential returns per unit of risk. Xinyuan Real Estate is currently generating about -0.13 per unit of risk. If you would invest 13,956 in NVIDIA on August 24, 2024 and sell it today you would earn a total of 711.00 from holding NVIDIA or generate 5.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
NVIDIA vs. Xinyuan Real Estate
Performance |
| Timeline |
| NVIDIA |
| Xinyuan Real Estate |
NVIDIA and Xinyuan Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NVIDIA and Xinyuan Real
The main advantage of trading using opposite NVIDIA and Xinyuan Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NVIDIA position performs unexpectedly, Xinyuan Real 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 Xinyuan Real will offset losses from the drop in Xinyuan Real's long position.| NVIDIA vs. Intel | NVIDIA vs. Taiwan Semiconductor Manufacturing | NVIDIA vs. Marvell Technology Group | NVIDIA vs. Micron Technology |
| Xinyuan Real vs. AMREP | Xinyuan Real vs. Alset Ehome International | Xinyuan Real vs. Landsea Homes Corp | Xinyuan Real vs. Bayport International Holdings |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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