Correlation Between Nvidia CDR and Pace Metals

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

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

Diversification Opportunities for Nvidia CDR and Pace Metals

0.0

Correlation Coefficient

Nvidia CDR  Pace Metals

Pay attention - limited upside

The 3 months correlation between Nvidia and Pace is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Nvidia CDR and Pace Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pace Metals 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 Pace Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pace Metals has no effect on the direction of Nvidia CDR i.e., Nvidia CDR and Pace Metals go up and down completely randomly.

Pair Corralation between Nvidia CDR and Pace Metals

If you would invest  2,369  in Nvidia CDR on April 23, 2025 and sell it today you would earn a total of  1,572  from holding Nvidia CDR or generate 66.36% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Nvidia CDR  vs.  Pace Metals

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

Pace Metals

Risk-Adjusted Performance

Very Weak

Over the last 90 days Pace Metals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable fundamental indicators, Pace Metals is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Nvidia CDR and Pace Metals

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

The idea behind Nvidia CDR and Pace Metals 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.