Correlation Between Nu Holdings and Zions Bancorporation
Can any of the company-specific risk be diversified away by investing in both Nu Holdings and Zions Bancorporation 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 Zions Bancorporation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nu Holdings and Zions Bancorporation National, you can compare the effects of market volatilities on Nu Holdings and Zions Bancorporation 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 Zions Bancorporation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nu Holdings and Zions Bancorporation.
Diversification Opportunities for Nu Holdings and Zions Bancorporation
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nu Holdings and Zions is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Nu Holdings and Zions Bancorp. National in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zions Bancorporation 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 Zions Bancorporation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zions Bancorporation has no effect on the direction of Nu Holdings i.e., Nu Holdings and Zions Bancorporation go up and down completely randomly.
Pair Corralation between Nu Holdings and Zions Bancorporation
Allowing for the 90-day total investment horizon Nu Holdings is expected to generate 1.34 times more return on investment than Zions Bancorporation. However, Nu Holdings is 1.34 times more volatile than Zions Bancorporation National. It trades about 0.1 of its potential returns per unit of risk. Zions Bancorporation National is currently generating about 0.05 per unit of risk. If you would invest 386.00 in Nu Holdings on September 12, 2024 and sell it today you would earn a total of 820.50 from holding Nu Holdings or generate 212.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Nu Holdings vs. Zions Bancorp. National
Performance |
| Timeline |
| Nu Holdings |
| Zions Bancorporation |
Nu Holdings and Zions Bancorporation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nu Holdings and Zions Bancorporation
The main advantage of trading using opposite Nu Holdings and Zions Bancorporation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nu Holdings position performs unexpectedly, Zions Bancorporation 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 Zions Bancorporation will offset losses from the drop in Zions Bancorporation's long position.| Nu Holdings vs. JPMorgan Chase Co | Nu Holdings vs. Citigroup | Nu Holdings vs. Wells Fargo | Nu Holdings vs. Toronto Dominion Bank |
| Zions Bancorporation vs. Capital One Financial | Zions Bancorporation vs. Capital One Financial | Zions Bancorporation vs. Bank of America | Zions Bancorporation vs. KeyCorp |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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