Correlation Between Nu Holdings and KB Financial
Can any of the company-specific risk be diversified away by investing in both Nu Holdings and KB 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 KB 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 KB Financial Group, you can compare the effects of market volatilities on Nu Holdings and KB 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 KB Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nu Holdings and KB Financial.
Diversification Opportunities for Nu Holdings and KB Financial
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Nu Holdings and KB Financial is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Nu Holdings and KB Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KB Financial Group 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 KB Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KB Financial Group has no effect on the direction of Nu Holdings i.e., Nu Holdings and KB Financial go up and down completely randomly.
Pair Corralation between Nu Holdings and KB Financial
Allowing for the 90-day total investment horizon Nu Holdings is expected to generate 1.41 times more return on investment than KB Financial. However, Nu Holdings is 1.41 times more volatile than KB Financial Group. It trades about 0.41 of its potential returns per unit of risk. KB Financial Group is currently generating about -0.3 per unit of risk. If you would invest 1,153 in Nu Holdings on November 18, 2024 and sell it today you would earn a total of 217.00 from holding Nu Holdings or generate 18.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nu Holdings vs. KB Financial Group
Performance |
| Timeline |
| Nu Holdings |
| KB Financial Group |
Nu Holdings and KB Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nu Holdings and KB Financial
The main advantage of trading using opposite Nu Holdings and KB Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nu Holdings position performs unexpectedly, KB 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 KB Financial will offset losses from the drop in KB 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 |
| KB Financial vs. Banco Santander Brasil | KB Financial vs. CrossFirst Bankshares | KB Financial vs. Banco Bradesco SA | KB Financial vs. CF Bankshares |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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