Correlation Between Nu Holdings and SP Global
Can any of the company-specific risk be diversified away by investing in both Nu Holdings and SP Global 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 SP Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nu Holdings and SP Global, you can compare the effects of market volatilities on Nu Holdings and SP Global 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 SP Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nu Holdings and SP Global.
Diversification Opportunities for Nu Holdings and SP Global
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nu Holdings and SPGI is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Nu Holdings and SP Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SP Global 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 SP Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SP Global has no effect on the direction of Nu Holdings i.e., Nu Holdings and SP Global go up and down completely randomly.
Pair Corralation between Nu Holdings and SP Global
Allowing for the 90-day total investment horizon Nu Holdings is expected to under-perform the SP Global. In addition to that, Nu Holdings is 3.59 times more volatile than SP Global. It trades about -0.22 of its total potential returns per unit of risk. SP Global is currently generating about 0.43 per unit of volatility. If you would invest 48,509 in SP Global on August 31, 2024 and sell it today you would earn a total of 3,777 from holding SP Global or generate 7.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nu Holdings vs. SP Global
Performance |
| Timeline |
| Nu Holdings |
| SP Global |
Nu Holdings and SP Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nu Holdings and SP Global
The main advantage of trading using opposite Nu Holdings and SP Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nu Holdings position performs unexpectedly, SP Global 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 SP Global will offset losses from the drop in SP Global's long position.| Nu Holdings vs. KeyCorp | Nu Holdings vs. Comerica | Nu Holdings vs. First Horizon National | Nu Holdings vs. Western Alliance Bancorporation |
| SP Global vs. MSCI Inc | SP Global vs. Nasdaq Inc | SP Global vs. Intercontinental Exchange | SP Global vs. CME Group |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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