Correlation Between NVIDIA and Rothschild

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

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

Diversification Opportunities for NVIDIA and Rothschild

-0.44

Correlation Coefficient

NVIDIA  Rothschild

Very good diversification

The 3 months correlation between NVIDIA and Rothschild is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding NVIDIA and Rothschild Co SCA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rothschild Co SCA 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 Rothschild. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rothschild Co SCA has no effect on the direction of NVIDIA i.e., NVIDIA and Rothschild go up and down completely randomly.

Pair Corralation between NVIDIA and Rothschild

If you would invest  3,992  in Rothschild Co SCA on January 25, 2024 and sell it today you would earn a total of  0.00  from holding Rothschild Co SCA or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	4.55%
Values	Daily Returns

NVIDIA  vs.  Rothschild Co SCA

NVIDIA

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in NVIDIA are ranked lower than 10 (%) 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.

Rothschild Co SCA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Rothschild Co SCA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable forward-looking indicators, Rothschild is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with NVIDIA and Rothschild

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

The idea behind NVIDIA and Rothschild Co SCA 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.