Correlation Between NVIDIA CDR and Primaris Retail

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

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

Diversification Opportunities for NVIDIA CDR and Primaris Retail

0.74

Correlation Coefficient

NVIDIA CDR  Primaris Retail

Poor diversification

The 3 months correlation between NVIDIA and Primaris is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding NVIDIA CDR and Primaris Retail RE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Primaris Retail RE 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 Primaris Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Primaris Retail RE has no effect on the direction of NVIDIA CDR i.e., NVIDIA CDR and Primaris Retail go up and down completely randomly.

Pair Corralation between NVIDIA CDR and Primaris Retail

Assuming the 90 days trading horizon NVIDIA CDR is expected to generate 1.86 times more return on investment than Primaris Retail. However, NVIDIA CDR is 1.86 times more volatile than Primaris Retail RE. It trades about 0.46 of its potential returns per unit of risk. Primaris Retail RE is currently generating about 0.1 per unit of risk. If you would invest  2,369  in NVIDIA CDR on April 23, 2025 and sell it today you would earn a total of  1,564  from holding NVIDIA CDR or generate 66.02% return on investment over 90 days.

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

NVIDIA CDR  vs.  Primaris Retail RE

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

Primaris Retail RE

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Primaris Retail RE are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Primaris Retail is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with NVIDIA CDR and Primaris Retail

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

The idea behind NVIDIA CDR and Primaris Retail RE 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.