Correlation Between Nuveen Small and Kinetics Small
Can any of the company-specific risk be diversified away by investing in both Nuveen Small and Kinetics Small 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 Nuveen Small and Kinetics Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nuveen Small Cap and Kinetics Small Cap, you can compare the effects of market volatilities on Nuveen Small and Kinetics Small 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 Nuveen Small with a short position of Kinetics Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuveen Small and Kinetics Small.
Diversification Opportunities for Nuveen Small and Kinetics Small
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between NUVEEN and Kinetics is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen Small Cap and Kinetics Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinetics Small Cap and Nuveen Small 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 Nuveen Small Cap are associated (or correlated) with Kinetics Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kinetics Small Cap has no effect on the direction of Nuveen Small i.e., Nuveen Small and Kinetics Small go up and down completely randomly.
Pair Corralation between Nuveen Small and Kinetics Small
Assuming the 90 days horizon Nuveen Small Cap is expected to generate 0.48 times more return on investment than Kinetics Small. However, Nuveen Small Cap is 2.1 times less risky than Kinetics Small. It trades about -0.14 of its potential returns per unit of risk. Kinetics Small Cap is currently generating about -0.1 per unit of risk. If you would invest 1,695 in Nuveen Small Cap on October 25, 2024 and sell it today you would lose (97.00) from holding Nuveen Small Cap or give up 5.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nuveen Small Cap vs. Kinetics Small Cap
Performance |
| Timeline |
| Nuveen Small Cap |
| Kinetics Small Cap |
Nuveen Small and Kinetics Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nuveen Small and Kinetics Small
The main advantage of trading using opposite Nuveen Small and Kinetics Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuveen Small position performs unexpectedly, Kinetics Small 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 Kinetics Small will offset losses from the drop in Kinetics Small's long position.| Nuveen Small vs. Guggenheim Diversified Income | Nuveen Small vs. T Rowe Price | Nuveen Small vs. Delaware Limited Term Diversified | Nuveen Small vs. Davenport Small Cap |
| Kinetics Small vs. Barings Global Floating | Kinetics Small vs. Kinetics Global Fund | Kinetics Small vs. Dws Global Macro | Kinetics Small vs. Aqr Global Macro |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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