Correlation Between Nu Holdings and Peoples Bancorp

Can any of the company-specific risk be diversified away by investing in both Nu Holdings and Peoples Bancorp 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 Peoples Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Nu Holdings and Peoples Bancorp of, you can compare the effects of market volatilities on Nu Holdings and Peoples Bancorp 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 Peoples Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nu Holdings and Peoples Bancorp.

Diversification Opportunities for Nu Holdings and Peoples Bancorp

-0.66

Correlation Coefficient

Nu Holdings  Peoples Bancorp

Excellent diversification

The 3 months correlation between Nu Holdings and Peoples is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Nu Holdings and Peoples Bancorp of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Peoples Bancorp 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 Peoples Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Peoples Bancorp has no effect on the direction of Nu Holdings i.e., Nu Holdings and Peoples Bancorp go up and down completely randomly.

Pair Corralation between Nu Holdings and Peoples Bancorp

Allowing for the 90-day total investment horizon Nu Holdings is expected to under-perform the Peoples Bancorp. In addition to that, Nu Holdings is 1.21 times more volatile than Peoples Bancorp of. It trades about -0.15 of its total potential returns per unit of risk. Peoples Bancorp of is currently generating about 0.11 per unit of volatility. If you would invest  2,467  in Peoples Bancorp of on October 12, 2024 and sell it today you would earn a total of  383.00  from holding Peoples Bancorp of or generate 15.52% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Nu Holdings  vs.  Peoples Bancorp of

Nu Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nu Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Peoples Bancorp

Risk-Adjusted Performance

8 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Peoples Bancorp of are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite quite unsteady fundamental drivers, Peoples Bancorp disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Nu Holdings and Peoples Bancorp

The main advantage of trading using opposite Nu Holdings and Peoples Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nu Holdings position performs unexpectedly, Peoples Bancorp 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 Peoples Bancorp will offset losses from the drop in Peoples Bancorp's long position.

The idea behind Nu Holdings and Peoples Bancorp of pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.