NVDA — factor decomposition (Technology)

How much of NVDA's move over the window is systematic (market, XLK sector-excess, rate-excess via TLT) vs. idiosyncratic (stock-specific).

Return decomposition (log-return points, additive)

Market+37.45ppSector (excess)+29.29ppRate (excess)+0.79ppIdiosyncratic-43.44pp

Factor betas

Beta · Market (SPY)+1.86
Beta · Sector-excess (XLK)+0.89
Beta · Rate-excess (TLT)-0.36
0.54
Window2025-07-01 → 2026-07-31 (273 trading days)

Read

R² is 0.54 — a reasonably reliable fit; the betas and the split below are worth reading at face value.

Note: the net move here (+24.1pp) is small relative to the systematic and idiosyncratic swings underneath it — they're largely offsetting each other, which is why the idiosyncratic share below exceeds 100% (it's dividing by a small net, not an error). Read the pp values themselves as the meaningful numbers here, not the ratio.

Of NVDA's +24.1pp move over this window, -43.4pp (180% of the total magnitude) is idiosyncratic — not explained by riding market, sector, or rate moves. The rest (+67.5pp) came from systematic exposure: market +37.4pp, sector +29.3pp, rate +0.8pp.