Correlation Between NVIDIA CDR and Medexus Pharmaceuticals

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

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

Diversification Opportunities for NVIDIA CDR and Medexus Pharmaceuticals

0.53

Correlation Coefficient

NVIDIA CDR  Medexus Pharmaceuticals

Very weak diversification

The 3 months correlation between NVIDIA and Medexus is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding NVIDIA CDR and Medexus Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Medexus Pharmaceuticals 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 Medexus Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Medexus Pharmaceuticals has no effect on the direction of NVIDIA CDR i.e., NVIDIA CDR and Medexus Pharmaceuticals go up and down completely randomly.

Pair Corralation between NVIDIA CDR and Medexus Pharmaceuticals

Assuming the 90 days trading horizon NVIDIA CDR is expected to generate 0.56 times more return on investment than Medexus Pharmaceuticals. However, NVIDIA CDR is 1.78 times less risky than Medexus Pharmaceuticals. It trades about 0.4 of its potential returns per unit of risk. Medexus Pharmaceuticals is currently generating about -0.01 per unit of risk. If you would invest  2,452  in NVIDIA CDR on April 24, 2025 and sell it today you would earn a total of  1,387  from holding NVIDIA CDR or generate 56.57% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.41%
Values	Daily Returns

NVIDIA CDR  vs.  Medexus Pharmaceuticals

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 31 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, NVIDIA CDR exhibited solid returns over the last few months and may actually be approaching a breakup point.

Medexus Pharmaceuticals

Risk-Adjusted Performance

Very Weak

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

Pair Trading with NVIDIA CDR and Medexus Pharmaceuticals

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

The idea behind NVIDIA CDR and Medexus Pharmaceuticals 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.