Correlation Between NVIDIA and ProShares
Can any of the company-specific risk be diversified away by investing in both NVIDIA and ProShares 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 ProShares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NVIDIA and ProShares K 1 Free, you can compare the effects of market volatilities on NVIDIA and ProShares 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 ProShares. Check out your portfolio center. Please also check ongoing floating volatility patterns of NVIDIA and ProShares.
Diversification Opportunities for NVIDIA and ProShares
Poor diversification
The 3 months correlation between NVIDIA and ProShares is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding NVIDIA and ProShares K 1 Free in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares K 1 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 ProShares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares K 1 has no effect on the direction of NVIDIA i.e., NVIDIA and ProShares go up and down completely randomly.
Pair Corralation between NVIDIA and ProShares
Given the investment horizon of 90 days NVIDIA is expected to under-perform the ProShares. In addition to that, NVIDIA is 3.55 times more volatile than ProShares K 1 Free. It trades about -0.24 of its total potential returns per unit of risk. ProShares K 1 Free is currently generating about 0.1 per unit of volatility. If you would invest 4,720 in ProShares K 1 Free on January 20, 2024 and sell it today you would earn a total of 84.00 from holding ProShares K 1 Free or generate 1.78% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
NVIDIA vs. ProShares K 1 Free
Performance |
Timeline |
NVIDIA |
ProShares K 1 |
NVIDIA and ProShares Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with NVIDIA and ProShares
The main advantage of trading using opposite NVIDIA and ProShares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NVIDIA position performs unexpectedly, ProShares 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 ProShares will offset losses from the drop in ProShares' long position.NVIDIA vs. Intel | NVIDIA vs. Taiwan Semiconductor Manufacturing | NVIDIA vs. Marvell Technology Group | NVIDIA vs. Micron Technology |
ProShares vs. United States 12 | ProShares vs. Credit Suisse X Links | ProShares vs. Invesco DB Oil | ProShares vs. United States 12 |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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