Correlation Between NVIDIA CDR and MAS Gold

Can any of the company-specific risk be diversified away by investing in both NVIDIA CDR and MAS Gold 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 CDR and MAS Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between NVIDIA CDR and MAS Gold Corp, you can compare the effects of market volatilities on NVIDIA CDR and MAS Gold 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 CDR with a short position of MAS Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of NVIDIA CDR and MAS Gold.

Diversification Opportunities for NVIDIA CDR and MAS Gold

-0.45

Correlation Coefficient

NVIDIA CDR  MAS Gold

Very good diversification

The 3 months correlation between NVIDIA and MAS is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding NVIDIA CDR and MAS Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MAS Gold Corp and NVIDIA CDR 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 CDR are associated (or correlated) with MAS Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MAS Gold Corp has no effect on the direction of NVIDIA CDR i.e., NVIDIA CDR and MAS Gold go up and down completely randomly.

Pair Corralation between NVIDIA CDR and MAS Gold

Assuming the 90 days trading horizon NVIDIA CDR is expected to under-perform the MAS Gold. But the stock apears to be less risky and, when comparing its historical volatility, NVIDIA CDR is 19.39 times less risky than MAS Gold. The stock trades about -0.11 of its potential returns per unit of risk. The MAS Gold Corp is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest  1.00  in MAS Gold Corp on September 23, 2024 and sell it today you would earn a total of  1.00  from holding MAS Gold Corp or generate 100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

NVIDIA CDR  vs.  MAS Gold Corp

NVIDIA CDR

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in NVIDIA CDR are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, NVIDIA CDR exhibited solid returns over the last few months and may actually be approaching a breakup point.

MAS Gold Corp

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in MAS Gold Corp are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, MAS Gold showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with NVIDIA CDR and MAS Gold

The main advantage of trading using opposite NVIDIA CDR and MAS Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NVIDIA CDR position performs unexpectedly, MAS Gold 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 MAS Gold will offset losses from the drop in MAS Gold's long position.

The idea behind NVIDIA CDR and MAS Gold Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.