Correlation Between Dow Jones and Nuveen Intermediate
Can any of the company-specific risk be diversified away by investing in both Dow Jones and Nuveen Intermediate 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 Dow Jones and Nuveen Intermediate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dow Jones Industrial and Nuveen Intermediate Duration, you can compare the effects of market volatilities on Dow Jones and Nuveen Intermediate 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 Dow Jones with a short position of Nuveen Intermediate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and Nuveen Intermediate.
Diversification Opportunities for Dow Jones and Nuveen Intermediate
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Dow and Nuveen is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and Nuveen Intermediate Duration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Intermediate and Dow Jones 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 Dow Jones Industrial are associated (or correlated) with Nuveen Intermediate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Intermediate has no effect on the direction of Dow Jones i.e., Dow Jones and Nuveen Intermediate go up and down completely randomly.
Pair Corralation between Dow Jones and Nuveen Intermediate
Assuming the 90 days trading horizon Dow Jones Industrial is expected to generate 3.91 times more return on investment than Nuveen Intermediate. However, Dow Jones is 3.91 times more volatile than Nuveen Intermediate Duration. It trades about 0.12 of its potential returns per unit of risk. Nuveen Intermediate Duration is currently generating about 0.09 per unit of risk. If you would invest 3,889,280 in Dow Jones Industrial on September 3, 2024 and sell it today you would earn a total of 601,785 from holding Dow Jones Industrial or generate 15.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dow Jones Industrial vs. Nuveen Intermediate Duration
Performance |
| Timeline |
Dow Jones and Nuveen Intermediate Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
Nuveen Intermediate Duration
Pair trading matchups for Nuveen Intermediate
Pair Trading with Dow Jones and Nuveen Intermediate
The main advantage of trading using opposite Dow Jones and Nuveen Intermediate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, Nuveen Intermediate 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 Intermediate will offset losses from the drop in Nuveen Intermediate's long position.| Dow Jones vs. Eastern Co | Dow Jones vs. Uber Technologies | Dow Jones vs. AKITA Drilling | Dow Jones vs. Chemours Co |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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