Correlation Between NVIDIA CDR and Appili Therapeutics

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

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

Diversification Opportunities for NVIDIA CDR and Appili Therapeutics

-0.7

Correlation Coefficient

NVIDIA CDR  Appili Therapeutics

Excellent diversification

The 3 months correlation between NVIDIA and Appili is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding NVIDIA CDR and Appili Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Appili Therapeutics 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 Appili Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Appili Therapeutics has no effect on the direction of NVIDIA CDR i.e., NVIDIA CDR and Appili Therapeutics go up and down completely randomly.

Pair Corralation between NVIDIA CDR and Appili Therapeutics

Assuming the 90 days trading horizon NVIDIA CDR is expected to generate 0.14 times more return on investment than Appili Therapeutics. However, NVIDIA CDR is 7.02 times less risky than Appili Therapeutics. It trades about 0.48 of its potential returns per unit of risk. Appili Therapeutics is currently generating about -0.02 per unit of risk. If you would invest  2,284  in NVIDIA CDR on April 22, 2025 and sell it today you would earn a total of  1,675  from holding NVIDIA CDR or generate 73.34% return on investment over 90 days.

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

NVIDIA CDR  vs.  Appili Therapeutics

NVIDIA CDR

Risk-Adjusted Performance

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in NVIDIA CDR are ranked lower than 38 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak technical and fundamental indicators, NVIDIA CDR exhibited solid returns over the last few months and may actually be approaching a breakup point.

Appili Therapeutics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Appili Therapeutics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in August 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with NVIDIA CDR and Appili Therapeutics

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

The idea behind NVIDIA CDR and Appili Therapeutics 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.