Correlation Between NVIDIA and Joshua Gold

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

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

Diversification Opportunities for NVIDIA and Joshua Gold

-0.77

Correlation Coefficient

NVIDIA  Joshua Gold

Pay attention - limited upside

The 3 months correlation between NVIDIA and Joshua is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding NVIDIA and Joshua Gold Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Joshua Gold Resources 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 Joshua Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Joshua Gold Resources has no effect on the direction of NVIDIA i.e., NVIDIA and Joshua Gold go up and down completely randomly.

Pair Corralation between NVIDIA and Joshua Gold

Given the investment horizon of 90 days NVIDIA is expected to generate 0.23 times more return on investment than Joshua Gold. However, NVIDIA is 4.42 times less risky than Joshua Gold. It trades about 0.1 of its potential returns per unit of risk. Joshua Gold Resources is currently generating about -0.05 per unit of risk. If you would invest  11,677  in NVIDIA on September 15, 2024 and sell it today you would earn a total of  1,748  from holding NVIDIA or generate 14.97% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.46%
Values	Daily Returns

NVIDIA  vs.  Joshua Gold Resources

NVIDIA

Risk-Adjusted Performance

8 of 100

OK

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

Joshua Gold Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Joshua Gold Resources has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's technical indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with NVIDIA and Joshua Gold

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

The idea behind NVIDIA and Joshua Gold Resources 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.

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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.