Correlation Between Parkland Fuel and NVIDIA CDR
Can any of the company-specific risk be diversified away by investing in both Parkland Fuel and NVIDIA CDR 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 Parkland Fuel and NVIDIA CDR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Parkland Fuel and NVIDIA CDR, you can compare the effects of market volatilities on Parkland Fuel and NVIDIA CDR 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 Parkland Fuel with a short position of NVIDIA CDR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Parkland Fuel and NVIDIA CDR.
Diversification Opportunities for Parkland Fuel and NVIDIA CDR
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Parkland and NVIDIA is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Parkland Fuel and NVIDIA CDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NVIDIA CDR and Parkland Fuel 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 Parkland Fuel are associated (or correlated) with NVIDIA CDR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NVIDIA CDR has no effect on the direction of Parkland Fuel i.e., Parkland Fuel and NVIDIA CDR go up and down completely randomly.
Pair Corralation between Parkland Fuel and NVIDIA CDR
Assuming the 90 days trading horizon Parkland Fuel is expected to under-perform the NVIDIA CDR. But the stock apears to be less risky and, when comparing its historical volatility, Parkland Fuel is 2.24 times less risky than NVIDIA CDR. The stock trades about -0.02 of its potential returns per unit of risk. The NVIDIA CDR is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 2,748 in NVIDIA CDR on September 2, 2024 and sell it today you would earn a total of 492.00 from holding NVIDIA CDR or generate 17.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Parkland Fuel vs. NVIDIA CDR
Performance |
| Timeline |
| Parkland Fuel |
| NVIDIA CDR |
Parkland Fuel and NVIDIA CDR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Parkland Fuel and NVIDIA CDR
The main advantage of trading using opposite Parkland Fuel and NVIDIA CDR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Parkland Fuel position performs unexpectedly, NVIDIA CDR 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 NVIDIA CDR will offset losses from the drop in NVIDIA CDR's long position.| Parkland Fuel vs. Keyera Corp | Parkland Fuel vs. Gibson Energy | Parkland Fuel vs. TFI International | Parkland Fuel vs. Pembina Pipeline Corp |
| NVIDIA CDR vs. WELL Health Technologies | NVIDIA CDR vs. Queens Road Capital | NVIDIA CDR vs. Major Drilling Group | NVIDIA CDR vs. Brookfield Office Properties |
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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