Correlation Between HSBC Holdings and Nu Holdings
Can any of the company-specific risk be diversified away by investing in both HSBC Holdings 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 HSBC Holdings and Nu Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HSBC Holdings PLC and Nu Holdings, you can compare the effects of market volatilities on HSBC Holdings 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 HSBC Holdings with a short position of Nu Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of HSBC Holdings and Nu Holdings.
Diversification Opportunities for HSBC Holdings and Nu Holdings
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between HSBC and Nu Holdings is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding HSBC Holdings PLC and Nu Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nu Holdings and HSBC Holdings 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 HSBC Holdings PLC 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 HSBC Holdings i.e., HSBC Holdings and Nu Holdings go up and down completely randomly.
Pair Corralation between HSBC Holdings and Nu Holdings
Given the investment horizon of 90 days HSBC Holdings PLC is expected to generate 0.41 times more return on investment than Nu Holdings. However, HSBC Holdings PLC is 2.46 times less risky than Nu Holdings. It trades about 0.18 of its potential returns per unit of risk. Nu Holdings is currently generating about -0.02 per unit of risk. If you would invest 4,296 in HSBC Holdings PLC on November 2, 2024 and sell it today you would earn a total of 971.00 from holding HSBC Holdings PLC or generate 22.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
HSBC Holdings PLC vs. Nu Holdings
Performance |
| Timeline |
| HSBC Holdings PLC |
| Nu Holdings |
HSBC Holdings and Nu Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HSBC Holdings and Nu Holdings
The main advantage of trading using opposite HSBC Holdings and Nu Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HSBC Holdings 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.| HSBC Holdings vs. ING Group NV | HSBC Holdings vs. Natwest Group PLC | HSBC Holdings vs. Banco Santander SA | HSBC Holdings vs. UBS Group AG |
| Nu Holdings vs. JPMorgan Chase Co | Nu Holdings vs. Citigroup | Nu Holdings vs. Wells Fargo | Nu Holdings vs. Toronto Dominion Bank |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Fundamental Analysis View fundamental data based on most recent published financial statements |