Correlation Between Nu Holdings and Metal Sky
Can any of the company-specific risk be diversified away by investing in both Nu Holdings and Metal Sky 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 Metal Sky into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nu Holdings and Metal Sky Star, you can compare the effects of market volatilities on Nu Holdings and Metal Sky 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 Metal Sky. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nu Holdings and Metal Sky.
Diversification Opportunities for Nu Holdings and Metal Sky
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nu Holdings and Metal is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Nu Holdings and Metal Sky Star in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metal Sky Star 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 Metal Sky. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metal Sky Star has no effect on the direction of Nu Holdings i.e., Nu Holdings and Metal Sky go up and down completely randomly.
Pair Corralation between Nu Holdings and Metal Sky
Allowing for the 90-day total investment horizon Nu Holdings is expected to generate 1.06 times more return on investment than Metal Sky. However, Nu Holdings is 1.06 times more volatile than Metal Sky Star. It trades about 0.38 of its potential returns per unit of risk. Metal Sky Star is currently generating about 0.05 per unit of risk. If you would invest 1,037 in Nu Holdings on October 25, 2024 and sell it today you would earn a total of 162.00 from holding Nu Holdings or generate 15.62% 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. Metal Sky Star
Performance |
| Timeline |
| Nu Holdings |
| Metal Sky Star |
Nu Holdings and Metal Sky Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nu Holdings and Metal Sky
The main advantage of trading using opposite Nu Holdings and Metal Sky positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nu Holdings position performs unexpectedly, Metal Sky 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 Metal Sky will offset losses from the drop in Metal Sky's long position.| Nu Holdings vs. JPMorgan Chase Co | Nu Holdings vs. Citigroup | Nu Holdings vs. Wells Fargo | Nu Holdings vs. Toronto Dominion Bank |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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