Correlation Between Nuveen Dow and Nuveen SP
Can any of the company-specific risk be diversified away by investing in both Nuveen Dow and Nuveen SP 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 Dow and Nuveen SP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nuveen Dow 30Sm and Nuveen SP 500, you can compare the effects of market volatilities on Nuveen Dow and Nuveen SP 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 Dow with a short position of Nuveen SP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuveen Dow and Nuveen SP.
Diversification Opportunities for Nuveen Dow and Nuveen SP
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Nuveen and Nuveen is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen Dow 30Sm and Nuveen SP 500 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen SP 500 and Nuveen Dow 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 Dow 30Sm are associated (or correlated) with Nuveen SP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen SP 500 has no effect on the direction of Nuveen Dow i.e., Nuveen Dow and Nuveen SP go up and down completely randomly.
Pair Corralation between Nuveen Dow and Nuveen SP
Given the investment horizon of 90 days Nuveen Dow 30Sm is expected to generate 0.98 times more return on investment than Nuveen SP. However, Nuveen Dow 30Sm is 1.02 times less risky than Nuveen SP. It trades about 0.09 of its potential returns per unit of risk. Nuveen SP 500 is currently generating about 0.07 per unit of risk. If you would invest 1,278 in Nuveen Dow 30Sm on August 31, 2024 and sell it today you would earn a total of 297.00 from holding Nuveen Dow 30Sm or generate 23.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nuveen Dow 30Sm vs. Nuveen SP 500
Performance |
| Timeline |
| Nuveen Dow 30Sm |
| Nuveen SP 500 |
Nuveen Dow and Nuveen SP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nuveen Dow and Nuveen SP
The main advantage of trading using opposite Nuveen Dow and Nuveen SP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuveen Dow position performs unexpectedly, Nuveen SP 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 SP will offset losses from the drop in Nuveen SP's long position.| Nuveen Dow vs. Eaton Vance National | Nuveen Dow vs. Invesco High Income | Nuveen Dow vs. Blackrock Muniholdings Ny | Nuveen Dow vs. Nuveen California Select |
| Nuveen SP vs. Eaton Vance National | Nuveen SP vs. Invesco High Income | Nuveen SP vs. Blackrock Muniholdings Ny | Nuveen SP vs. Nuveen California Select |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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