Correlation Between UNITED UTILITIES and NVIDIA
Can any of the company-specific risk be diversified away by investing in both UNITED UTILITIES 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 UNITED UTILITIES and NVIDIA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UNITED UTILITIES GR and NVIDIA, you can compare the effects of market volatilities on UNITED UTILITIES 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 UNITED UTILITIES with a short position of NVIDIA. Check out your portfolio center. Please also check ongoing floating volatility patterns of UNITED UTILITIES and NVIDIA.
Diversification Opportunities for UNITED UTILITIES and NVIDIA
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between UNITED and NVIDIA is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding UNITED UTILITIES GR and NVIDIA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NVIDIA and UNITED UTILITIES 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 UNITED UTILITIES GR 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 UNITED UTILITIES i.e., UNITED UTILITIES and NVIDIA go up and down completely randomly.
Pair Corralation between UNITED UTILITIES and NVIDIA
Assuming the 90 days trading horizon UNITED UTILITIES is expected to generate 19.36 times less return on investment than NVIDIA. But when comparing it to its historical volatility, UNITED UTILITIES GR is 2.14 times less risky than NVIDIA. It trades about 0.01 of its potential returns per unit of risk. NVIDIA is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 2,076 in NVIDIA on October 30, 2024 and sell it today you would earn a total of 9,236 from holding NVIDIA or generate 444.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
UNITED UTILITIES GR vs. NVIDIA
Performance |
| Timeline |
| UNITED UTILITIES |
| NVIDIA |
UNITED UTILITIES and NVIDIA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UNITED UTILITIES and NVIDIA
The main advantage of trading using opposite UNITED UTILITIES and NVIDIA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UNITED UTILITIES 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.| UNITED UTILITIES vs. WILLIS LEASE FIN | UNITED UTILITIES vs. Global Ship Lease | UNITED UTILITIES vs. CNVISION MEDIA | UNITED UTILITIES vs. Fuji Media Holdings |
| NVIDIA vs. MELIA HOTELS | NVIDIA vs. INTERCONT HOTELS | NVIDIA vs. Sunstone Hotel Investors | NVIDIA vs. Xenia Hotels Resorts |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
Other Complementary Tools
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios |