Correlation Between Nu Holdings and Inter Co
Can any of the company-specific risk be diversified away by investing in both Nu Holdings and Inter Co 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 Inter Co into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nu Holdings and Inter Co Class, you can compare the effects of market volatilities on Nu Holdings and Inter Co 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 Inter Co. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nu Holdings and Inter Co.
Diversification Opportunities for Nu Holdings and Inter Co
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Nu Holdings and Inter is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Nu Holdings and Inter Co Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inter Co Class 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 Inter Co. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inter Co Class has no effect on the direction of Nu Holdings i.e., Nu Holdings and Inter Co go up and down completely randomly.
Pair Corralation between Nu Holdings and Inter Co
Allowing for the 90-day total investment horizon Nu Holdings is expected to generate 0.77 times more return on investment than Inter Co. However, Nu Holdings is 1.3 times less risky than Inter Co. It trades about 0.06 of its potential returns per unit of risk. Inter Co Class is currently generating about 0.04 per unit of risk. If you would invest 770.00 in Nu Holdings on September 12, 2024 and sell it today you would earn a total of 423.00 from holding Nu Holdings or generate 54.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nu Holdings vs. Inter Co Class
Performance |
| Timeline |
| Nu Holdings |
| Inter Co Class |
Nu Holdings and Inter Co Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nu Holdings and Inter Co
The main advantage of trading using opposite Nu Holdings and Inter Co positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nu Holdings position performs unexpectedly, Inter Co 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 Inter Co will offset losses from the drop in Inter Co's long position.| Nu Holdings vs. JPMorgan Chase Co | Nu Holdings vs. Citigroup | Nu Holdings vs. Wells Fargo | Nu Holdings vs. Toronto Dominion Bank |
| Inter Co vs. Community West Bancshares | Inter Co vs. First Financial Northwest | Inter Co vs. First Northwest Bancorp | Inter Co vs. First Capital |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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