Correlation Between NVIDIA and Polymet Mining

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

By analyzing existing cross correlation between NVIDIA and Polymet Mining Corp, you can compare the effects of market volatilities on NVIDIA and Polymet Mining 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 Polymet Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of NVIDIA and Polymet Mining.

Diversification Opportunities for NVIDIA and Polymet Mining

-0.48

Correlation Coefficient

NVIDIA  Polymet Mining

Very good diversification

The 3 months correlation between NVIDIA and Polymet is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding NVIDIA and Polymet Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Polymet Mining Corp 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 Polymet Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Polymet Mining Corp has no effect on the direction of NVIDIA i.e., NVIDIA and Polymet Mining go up and down completely randomly.

Pair Corralation between NVIDIA and Polymet Mining

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	Very Weak
Accuracy	1.56%
Values	Daily Returns

NVIDIA  vs.  Polymet Mining Corp

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.

Polymet Mining Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Polymet Mining Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy essential indicators, Polymet Mining is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with NVIDIA and Polymet Mining

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

The idea behind NVIDIA and Polymet Mining 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .