Correlation Between Nu Holdings and Banco Macro
Can any of the company-specific risk be diversified away by investing in both Nu Holdings and Banco Macro 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 Nu Holdings and Banco Macro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nu Holdings and Banco Macro SA, you can compare the effects of market volatilities on Nu Holdings and Banco Macro 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 Nu Holdings with a short position of Banco Macro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nu Holdings and Banco Macro.
Diversification Opportunities for Nu Holdings and Banco Macro
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Nu Holdings and Banco is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Nu Holdings and Banco Macro SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banco Macro SA and Nu 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 Nu Holdings are associated (or correlated) with Banco Macro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Banco Macro SA has no effect on the direction of Nu Holdings i.e., Nu Holdings and Banco Macro go up and down completely randomly.
Pair Corralation between Nu Holdings and Banco Macro
Allowing for the 90-day total investment horizon Nu Holdings is expected to under-perform the Banco Macro. But the stock apears to be less risky and, when comparing its historical volatility, Nu Holdings is 1.36 times less risky than Banco Macro. The stock trades about -0.12 of its potential returns per unit of risk. The Banco Macro SA is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 7,911 in Banco Macro SA on October 26, 2024 and sell it today you would earn a total of 2,965 from holding Banco Macro SA or generate 37.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nu Holdings vs. Banco Macro SA
Performance |
| Timeline |
| Nu Holdings |
| Banco Macro SA |
Nu Holdings and Banco Macro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nu Holdings and Banco Macro
The main advantage of trading using opposite Nu Holdings and Banco Macro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nu Holdings position performs unexpectedly, Banco Macro 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 Banco Macro will offset losses from the drop in Banco Macro's long position.| Nu Holdings vs. JPMorgan Chase Co | Nu Holdings vs. Citigroup | Nu Holdings vs. Wells Fargo | Nu Holdings vs. Toronto Dominion Bank |
| Banco Macro vs. Grupo Supervielle SA | Banco Macro vs. BBVA Banco Frances | Banco Macro vs. Banco Bradesco SA | Banco Macro vs. Itau Unibanco Banco |
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 Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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