Correlation Between Nuveen SP and First Trust
Can any of the company-specific risk be diversified away by investing in both Nuveen SP and First Trust 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 SP and First Trust into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nuveen SP 500 and First Trust Intermediate, you can compare the effects of market volatilities on Nuveen SP and First Trust 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 SP with a short position of First Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuveen SP and First Trust.
Diversification Opportunities for Nuveen SP and First Trust
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Nuveen and First is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen SP 500 and First Trust Intermediate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust Intermediate and Nuveen SP 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 SP 500 are associated (or correlated) with First Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Trust Intermediate has no effect on the direction of Nuveen SP i.e., Nuveen SP and First Trust go up and down completely randomly.
Pair Corralation between Nuveen SP and First Trust
Given the investment horizon of 90 days Nuveen SP is expected to generate 1.11 times less return on investment than First Trust. But when comparing it to its historical volatility, Nuveen SP 500 is 1.3 times less risky than First Trust. It trades about 0.07 of its potential returns per unit of risk. First Trust Intermediate is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,489 in First Trust Intermediate on November 19, 2024 and sell it today you would earn a total of 399.00 from holding First Trust Intermediate or generate 26.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nuveen SP 500 vs. First Trust Intermediate
Performance |
| Timeline |
| Nuveen SP 500 |
| First Trust Intermediate |
Nuveen SP and First Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nuveen SP and First Trust
The main advantage of trading using opposite Nuveen SP and First Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuveen SP position performs unexpectedly, First Trust 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 First Trust will offset losses from the drop in First Trust's long position.| Nuveen SP vs. Nuveen SP 500 | Nuveen SP vs. Voya Global Equity | Nuveen SP vs. Nuveen NASDAQ 100 | Nuveen SP vs. Nuveen Real Asset |
| First Trust vs. RiverNorth Flexible Municipalome | First Trust vs. DWS Municipal Income | First Trust vs. Blackrock Munivest | First Trust vs. MFS Municipal Income |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
Other Complementary Tools
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities |