Correlation Between Telecom Argentina and NVIDIA
Can any of the company-specific risk be diversified away by investing in both Telecom Argentina and NVIDIA 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 Telecom Argentina and NVIDIA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Telecom Argentina and NVIDIA, you can compare the effects of market volatilities on Telecom Argentina and NVIDIA 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 Telecom Argentina with a short position of NVIDIA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Telecom Argentina and NVIDIA.
Diversification Opportunities for Telecom Argentina and NVIDIA
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Telecom and NVIDIA is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Telecom Argentina and NVIDIA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NVIDIA and Telecom Argentina 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 Telecom Argentina are associated (or correlated) with NVIDIA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NVIDIA has no effect on the direction of Telecom Argentina i.e., Telecom Argentina and NVIDIA go up and down completely randomly.
Pair Corralation between Telecom Argentina and NVIDIA
Assuming the 90 days trading horizon Telecom Argentina is expected to generate 1.58 times more return on investment than NVIDIA. However, Telecom Argentina is 1.58 times more volatile than NVIDIA. It trades about 0.25 of its potential returns per unit of risk. NVIDIA is currently generating about -0.27 per unit of risk. If you would invest 251,500 in Telecom Argentina on September 13, 2024 and sell it today you would earn a total of 48,000 from holding Telecom Argentina or generate 19.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Telecom Argentina vs. NVIDIA
Performance |
| Timeline |
| Telecom Argentina |
| NVIDIA |
Telecom Argentina and NVIDIA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Telecom Argentina and NVIDIA
The main advantage of trading using opposite Telecom Argentina and NVIDIA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Telecom Argentina position performs unexpectedly, NVIDIA 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 will offset losses from the drop in NVIDIA's long position.| Telecom Argentina vs. Grupo Televisa SAB | Telecom Argentina vs. Edesa Holding SA | Telecom Argentina vs. Vista Energy, SAB | Telecom Argentina vs. United States Steel |
| NVIDIA vs. Intel Corp CEDEAR | NVIDIA vs. Edesa Holding SA | NVIDIA vs. Longvie SA | NVIDIA vs. Vista Energy, SAB |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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