Six S&P 500 stocks often experience a surge when shares of Nvidia Corporation (NASDAQ:NVDA) take a dip, an analysis by CNBC revealed.
What Happened: The six U.S.-listed stocks that typically see a rise when Nvidia's shares falter include Jack Daniel's distiller Brown-Forman Corporation (NYSE:BF) (NYSE:BF), gaming giant Electronic Arts Inc. (NASDAQ:EA), health products manufacturer Henry Schein, Inc. (NASDAQ:HSIC), software outsourcing behemoth Cognizant Technology Solutions Corp (NASDAQ:CTSH), pet care company Zoetis Inc. (NYSE:ZTS), and securities exchange Cboe Global Markets, Inc. (BATS:CBOE), CNBC reported on Thursday.
The Pearson correlation coefficient, a measure of linear correlation between two variables, was used in the analysis to determine the relationship between the stock prices. The analysis screened S&P 500 stocks that show an inverse correlation to Nvidia over a month and year period, following Nvidia's stock falling into correction territory for the second time this month.
Some technical analysts have suggested that it might be time for investors to offload Nvidia too. Katie Stockton of Fairlead Strategies noted that chart patterns suggest a deeper pullback might be on the horizon "just in time for the seasonal adage of 'sell in May, and go away' to manifest itself in investor behavior."
Adam Parker of Trivariate Research also listed eight steady growth stocks that could replace Nvidia if investors are worried about overexposure.
Why It Matters: Nvidia's stock has been in the spotlight recently. In April, Evercore ISI predicted that Nvidia's stock could surge by 81% by 2025, suggesting that the company was only in the initial stages of generating outsized returns.
However, the stock has been under pressure due to concerns over rising interest rates and a slew of corporate earnings reports. This led to significant swings in Nvidia ETFs as bulls and bears battled it out.
As of Thursday, Nvidia's stock closed at $846.71, marking an increase of 0.76% from the previous close. The stock's 52-week high and low are $974 and $262.25 respectively, indicating significant fluctuations in the stock's performance.
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