Correlation Between Nu Holdings and KeyCorp
Can any of the company-specific risk be diversified away by investing in both Nu Holdings and KeyCorp 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 KeyCorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nu Holdings and KeyCorp, you can compare the effects of market volatilities on Nu Holdings and KeyCorp 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 KeyCorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nu Holdings and KeyCorp.
Diversification Opportunities for Nu Holdings and KeyCorp
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Nu Holdings and KeyCorp is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Nu Holdings and KeyCorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KeyCorp 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 KeyCorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KeyCorp has no effect on the direction of Nu Holdings i.e., Nu Holdings and KeyCorp go up and down completely randomly.
Pair Corralation between Nu Holdings and KeyCorp
Allowing for the 90-day total investment horizon Nu Holdings is expected to generate 1.1 times more return on investment than KeyCorp. However, Nu Holdings is 1.1 times more volatile than KeyCorp. It trades about 0.19 of its potential returns per unit of risk. KeyCorp is currently generating about 0.09 per unit of risk. If you would invest 964.00 in Nu Holdings on February 8, 2024 and sell it today you would earn a total of 235.00 from holding Nu Holdings or generate 24.38% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Nu Holdings vs. KeyCorp
Performance |
Timeline |
Nu Holdings |
KeyCorp |
Nu Holdings and KeyCorp Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Nu Holdings and KeyCorp
The main advantage of trading using opposite Nu Holdings and KeyCorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nu Holdings position performs unexpectedly, KeyCorp 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 KeyCorp will offset losses from the drop in KeyCorp's long position.Nu Holdings vs. JPMorgan Chase Co | Nu Holdings vs. Citigroup | Nu Holdings vs. Wells Fargo | Nu Holdings vs. Toronto Dominion Bank |
KeyCorp vs. Western Alliance Bancorporation | KeyCorp vs. Comerica | KeyCorp vs. Truist Financial Corp | KeyCorp vs. Fifth Third 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
Other Complementary Tools
Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges |