Correlation Between Nu Holdings and Heartland Financial
Can any of the company-specific risk be diversified away by investing in both Nu Holdings and Heartland Financial 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 Heartland Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nu Holdings and Heartland Financial USA, you can compare the effects of market volatilities on Nu Holdings and Heartland Financial 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 Heartland Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nu Holdings and Heartland Financial.
Diversification Opportunities for Nu Holdings and Heartland Financial
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Nu Holdings and Heartland is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Nu Holdings and Heartland Financial USA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Heartland Financial USA 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 Heartland Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Heartland Financial USA has no effect on the direction of Nu Holdings i.e., Nu Holdings and Heartland Financial go up and down completely randomly.
Pair Corralation between Nu Holdings and Heartland Financial
Allowing for the 90-day total investment horizon Nu Holdings is expected to generate 6.63 times more return on investment than Heartland Financial. However, Nu Holdings is 6.63 times more volatile than Heartland Financial USA. It trades about 0.54 of its potential returns per unit of risk. Heartland Financial USA is currently generating about -0.03 per unit of risk. If you would invest 1,063 in Nu Holdings on November 2, 2024 and sell it today you would earn a total of 281.00 from holding Nu Holdings or generate 26.43% 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. Heartland Financial USA
Performance |
| Timeline |
| Nu Holdings |
| Heartland Financial USA |
Nu Holdings and Heartland Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nu Holdings and Heartland Financial
The main advantage of trading using opposite Nu Holdings and Heartland Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nu Holdings position performs unexpectedly, Heartland Financial 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 Heartland Financial will offset losses from the drop in Heartland Financial's long position.| Nu Holdings vs. JPMorgan Chase Co | Nu Holdings vs. Citigroup | Nu Holdings vs. Wells Fargo | Nu Holdings vs. Toronto Dominion Bank |
| Heartland Financial vs. Wintrust Financial Corp | Heartland Financial vs. Pinnacle Financial Partners | Heartland Financial vs. WesBanco | Heartland Financial vs. OceanFirst Financial Corp |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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