Correlation Between Nvidia CDR and Apple

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

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

Diversification Opportunities for Nvidia CDR and Apple

0.28

Correlation Coefficient

Nvidia CDR  Apple

Modest diversification

The 3 months correlation between Nvidia and Apple is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Nvidia CDR and Apple Inc CDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc CDR 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 Apple. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apple Inc CDR has no effect on the direction of Nvidia CDR i.e., Nvidia CDR and Apple go up and down completely randomly.

Pair Corralation between Nvidia CDR and Apple

Assuming the 90 days trading horizon Nvidia CDR is expected to generate 1.21 times more return on investment than Apple. However, Nvidia CDR is 1.21 times more volatile than Apple Inc CDR. It trades about 0.39 of its potential returns per unit of risk. Apple Inc CDR is currently generating about 0.03 per unit of risk. If you would invest  2,555  in Nvidia CDR on April 25, 2025 and sell it today you would earn a total of  1,365  from holding Nvidia CDR or generate 53.42% return on investment over 90 days.

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

Nvidia CDR  vs.  Apple Inc CDR

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 30 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady basic indicators, Nvidia CDR displayed solid returns over the last few months and may actually be approaching a breakup point.

Apple Inc CDR

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Apple Inc CDR are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Apple is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Nvidia CDR and Apple

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

The idea behind Nvidia CDR and Apple Inc CDR 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.