Correlation Between Nu Holdings and United Security
Can any of the company-specific risk be diversified away by investing in both Nu Holdings and United Security 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 United Security into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nu Holdings and United Security Bancshares, you can compare the effects of market volatilities on Nu Holdings and United Security 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 United Security. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nu Holdings and United Security.
Diversification Opportunities for Nu Holdings and United Security
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Nu Holdings and United is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Nu Holdings and United Security Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Security Banc 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 United Security. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Security Banc has no effect on the direction of Nu Holdings i.e., Nu Holdings and United Security go up and down completely randomly.
Pair Corralation between Nu Holdings and United Security
Allowing for the 90-day total investment horizon Nu Holdings is expected to generate 1.45 times more return on investment than United Security. However, Nu Holdings is 1.45 times more volatile than United Security Bancshares. It trades about 0.08 of its potential returns per unit of risk. United Security Bancshares is currently generating about 0.05 per unit of risk. If you would invest 492.00 in Nu Holdings on October 24, 2024 and sell it today you would earn a total of 707.00 from holding Nu Holdings or generate 143.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nu Holdings vs. United Security Bancshares
Performance |
| Timeline |
| Nu Holdings |
| United Security Banc |
Nu Holdings and United Security Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nu Holdings and United Security
The main advantage of trading using opposite Nu Holdings and United Security positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nu Holdings position performs unexpectedly, United Security 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 United Security will offset losses from the drop in United Security's long position.| Nu Holdings vs. JPMorgan Chase Co | Nu Holdings vs. Citigroup | Nu Holdings vs. Wells Fargo | Nu Holdings vs. Toronto Dominion Bank |
| United Security vs. Home Federal Bancorp | United Security vs. Lake Shore Bancorp | United Security vs. Community West Bancshares | United Security vs. First Northwest Bancorp |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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