Correlation Between Nu Holdings and Bank of the
Can any of the company-specific risk be diversified away by investing in both Nu Holdings and Bank of the 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 Bank of the into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nu Holdings and Bank of the, you can compare the effects of market volatilities on Nu Holdings and Bank of the 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 Bank of the. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nu Holdings and Bank of the.
Diversification Opportunities for Nu Holdings and Bank of the
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nu Holdings and Bank is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Nu Holdings and Bank of the in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of the 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 Bank of the. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank of the has no effect on the direction of Nu Holdings i.e., Nu Holdings and Bank of the go up and down completely randomly.
Pair Corralation between Nu Holdings and Bank of the
Allowing for the 90-day total investment horizon Nu Holdings is expected to generate 0.41 times more return on investment than Bank of the. However, Nu Holdings is 2.46 times less risky than Bank of the. It trades about 0.46 of its potential returns per unit of risk. Bank of the is currently generating about -0.11 per unit of risk. If you would invest 1,036 in Nu Holdings on October 26, 2024 and sell it today you would earn a total of 201.00 from holding Nu Holdings or generate 19.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nu Holdings vs. Bank of the
Performance |
| Timeline |
| Nu Holdings |
| Bank of the |
Nu Holdings and Bank of the Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nu Holdings and Bank of the
The main advantage of trading using opposite Nu Holdings and Bank of the positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nu Holdings position performs unexpectedly, Bank of the 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 Bank of the will offset losses from the drop in Bank of the's long position.| Nu Holdings vs. JPMorgan Chase Co | Nu Holdings vs. Citigroup | Nu Holdings vs. Wells Fargo | Nu Holdings vs. Toronto Dominion Bank |
| Bank of the vs. National Bankshares | Bank of the vs. Home Federal Bancorp | Bank of the vs. Old Point Financial | Bank of the vs. Southern Missouri Bancorp |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
Other Complementary Tools
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |