Correlation Between Nu Holdings and Bank Ozk
Can any of the company-specific risk be diversified away by investing in both Nu Holdings and Bank Ozk 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 Bank Ozk into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nu Holdings and Bank Ozk Preferred, you can compare the effects of market volatilities on Nu Holdings and Bank Ozk 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 Bank Ozk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nu Holdings and Bank Ozk.
Diversification Opportunities for Nu Holdings and Bank Ozk
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Nu Holdings and Bank is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Nu Holdings and Bank Ozk Preferred in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Ozk Preferred 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 Bank Ozk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Ozk Preferred has no effect on the direction of Nu Holdings i.e., Nu Holdings and Bank Ozk go up and down completely randomly.
Pair Corralation between Nu Holdings and Bank Ozk
Allowing for the 90-day total investment horizon Nu Holdings is expected to generate 2.08 times more return on investment than Bank Ozk. However, Nu Holdings is 2.08 times more volatile than Bank Ozk Preferred. It trades about 0.39 of its potential returns per unit of risk. Bank Ozk Preferred is currently generating about 0.33 per unit of risk. If you would invest 1,115 in Nu Holdings on November 5, 2024 and sell it today you would earn a total of 209.00 from holding Nu Holdings or generate 18.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nu Holdings vs. Bank Ozk Preferred
Performance |
| Timeline |
| Nu Holdings |
| Bank Ozk Preferred |
Nu Holdings and Bank Ozk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nu Holdings and Bank Ozk
The main advantage of trading using opposite Nu Holdings and Bank Ozk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nu Holdings position performs unexpectedly, Bank Ozk 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 Bank Ozk will offset losses from the drop in Bank Ozk's long position.| Nu Holdings vs. Shinhan Financial Group | Nu Holdings vs. Woori Financial Group | Nu Holdings vs. Korea Electric Power | Nu Holdings vs. Orix Corp Ads |
| Bank Ozk vs. Regions Financial | Bank Ozk vs. Huntington Bancshares Incorporated | Bank Ozk vs. Texas Capital Bancshares | Bank Ozk vs. Washington Federal |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
Other Complementary Tools
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Commodity Directory Find actively traded commodities issued by global exchanges |