Correlation Between Banco Bradesco and Nu Holdings
Can any of the company-specific risk be diversified away by investing in both Banco Bradesco and Nu Holdings 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 Banco Bradesco and Nu Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Banco Bradesco SA and Nu Holdings, you can compare the effects of market volatilities on Banco Bradesco and Nu Holdings 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 Banco Bradesco with a short position of Nu Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banco Bradesco and Nu Holdings.
Diversification Opportunities for Banco Bradesco and Nu Holdings
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Banco and Nu Holdings is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Banco Bradesco SA and Nu Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nu Holdings and Banco Bradesco 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 Banco Bradesco SA are associated (or correlated) with Nu Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nu Holdings has no effect on the direction of Banco Bradesco i.e., Banco Bradesco and Nu Holdings go up and down completely randomly.
Pair Corralation between Banco Bradesco and Nu Holdings
Given the investment horizon of 90 days Banco Bradesco SA is expected to generate 0.66 times more return on investment than Nu Holdings. However, Banco Bradesco SA is 1.51 times less risky than Nu Holdings. It trades about -0.27 of its potential returns per unit of risk. Nu Holdings is currently generating about -0.22 per unit of risk. If you would invest 227.00 in Banco Bradesco SA on August 31, 2024 and sell it today you would lose (25.00) from holding Banco Bradesco SA or give up 11.01% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Banco Bradesco SA vs. Nu Holdings
Performance |
| Timeline |
| Banco Bradesco SA |
| Nu Holdings |
Banco Bradesco and Nu Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Banco Bradesco and Nu Holdings
The main advantage of trading using opposite Banco Bradesco and Nu Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banco Bradesco position performs unexpectedly, Nu Holdings 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 Nu Holdings will offset losses from the drop in Nu Holdings' long position.| Banco Bradesco vs. Home Federal Bancorp | Banco Bradesco vs. LINKBANCORP | Banco Bradesco vs. Affinity Bancshares | Banco Bradesco vs. Southern California Bancorp |
| Nu Holdings vs. KeyCorp | Nu Holdings vs. Comerica | Nu Holdings vs. First Horizon National | Nu Holdings vs. Western Alliance Bancorporation |
Check out your portfolio center.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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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