Correlation Between Nu Holdings and Comerica
Can any of the company-specific risk be diversified away by investing in both Nu Holdings and Comerica 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 Comerica into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nu Holdings and Comerica, you can compare the effects of market volatilities on Nu Holdings and Comerica 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 Comerica. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nu Holdings and Comerica.
Diversification Opportunities for Nu Holdings and Comerica
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Nu Holdings and Comerica is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Nu Holdings and Comerica in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Comerica 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 Comerica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Comerica has no effect on the direction of Nu Holdings i.e., Nu Holdings and Comerica go up and down completely randomly.
Pair Corralation between Nu Holdings and Comerica
Allowing for the 90-day total investment horizon Nu Holdings is expected to under-perform the Comerica. In addition to that, Nu Holdings is 1.1 times more volatile than Comerica. It trades about -0.19 of its total potential returns per unit of risk. Comerica is currently generating about 0.25 per unit of volatility. If you would invest 6,289 in Comerica on September 2, 2024 and sell it today you would earn a total of 936.00 from holding Comerica or generate 14.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nu Holdings vs. Comerica
Performance |
| Timeline |
| Nu Holdings |
| Comerica |
Nu Holdings and Comerica Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nu Holdings and Comerica
The main advantage of trading using opposite Nu Holdings and Comerica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nu Holdings position performs unexpectedly, Comerica 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 Comerica will offset losses from the drop in Comerica's long position.| Nu Holdings vs. JPMorgan Chase Co | Nu Holdings vs. Citigroup | Nu Holdings vs. Wells Fargo | Nu Holdings vs. Toronto Dominion Bank |
| Comerica vs. Western Alliance Bancorporation | Comerica vs. KeyCorp | Comerica vs. Truist Financial Corp | Comerica vs. Zions 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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