Correlation Between Nuveen SP and Nuveen NASDAQ
Can any of the company-specific risk be diversified away by investing in both Nuveen SP and Nuveen NASDAQ 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 Nuveen NASDAQ 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 Nuveen NASDAQ 100, you can compare the effects of market volatilities on Nuveen SP and Nuveen NASDAQ 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 Nuveen NASDAQ. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuveen SP and Nuveen NASDAQ.
Diversification Opportunities for Nuveen SP and Nuveen NASDAQ
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Nuveen and Nuveen is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen SP 500 and Nuveen NASDAQ 100 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen NASDAQ 100 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 Nuveen NASDAQ. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen NASDAQ 100 has no effect on the direction of Nuveen SP i.e., Nuveen SP and Nuveen NASDAQ go up and down completely randomly.
Pair Corralation between Nuveen SP and Nuveen NASDAQ
Given the investment horizon of 90 days Nuveen SP is expected to generate 1.61 times less return on investment than Nuveen NASDAQ. But when comparing it to its historical volatility, Nuveen SP 500 is 1.56 times less risky than Nuveen NASDAQ. It trades about 0.12 of its potential returns per unit of risk. Nuveen NASDAQ 100 is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 2,529 in Nuveen NASDAQ 100 on August 25, 2024 and sell it today you would earn a total of 59.00 from holding Nuveen NASDAQ 100 or generate 2.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nuveen SP 500 vs. Nuveen NASDAQ 100
Performance |
| Timeline |
| Nuveen SP 500 |
| Nuveen NASDAQ 100 |
Nuveen SP and Nuveen NASDAQ Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nuveen SP and Nuveen NASDAQ
The main advantage of trading using opposite Nuveen SP and Nuveen NASDAQ positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuveen SP position performs unexpectedly, Nuveen NASDAQ 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 Nuveen NASDAQ will offset losses from the drop in Nuveen NASDAQ'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 |
| Nuveen NASDAQ vs. BlackRock Science and | Nuveen NASDAQ vs. BlackRock Health Sciences | Nuveen NASDAQ vs. BlackRock Health Sciences | Nuveen NASDAQ vs. Cohen Steers Qualityome |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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