Correlation Between European Equity and Nuveen New
Can any of the company-specific risk be diversified away by investing in both European Equity and Nuveen New 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 European Equity and Nuveen New into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between European Equity Closed and Nuveen New York, you can compare the effects of market volatilities on European Equity and Nuveen New 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 European Equity with a short position of Nuveen New. Check out your portfolio center. Please also check ongoing floating volatility patterns of European Equity and Nuveen New.
Diversification Opportunities for European Equity and Nuveen New
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between European and Nuveen is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding European Equity Closed and Nuveen New York in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen New York and European Equity 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 European Equity Closed are associated (or correlated) with Nuveen New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen New York has no effect on the direction of European Equity i.e., European Equity and Nuveen New go up and down completely randomly.
Pair Corralation between European Equity and Nuveen New
Considering the 90-day investment horizon European Equity Closed is expected to generate 2.74 times more return on investment than Nuveen New. However, European Equity is 2.74 times more volatile than Nuveen New York. It trades about 0.42 of its potential returns per unit of risk. Nuveen New York is currently generating about 0.3 per unit of risk. If you would invest 814.00 in European Equity Closed on November 3, 2024 and sell it today you would earn a total of 56.00 from holding European Equity Closed or generate 6.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
European Equity Closed vs. Nuveen New York
Performance |
| Timeline |
| European Equity Closed |
| Nuveen New York |
European Equity and Nuveen New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with European Equity and Nuveen New
The main advantage of trading using opposite European Equity and Nuveen New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if European Equity position performs unexpectedly, Nuveen New 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 New will offset losses from the drop in Nuveen New's long position.| European Equity vs. XAI Octagon Floating | European Equity vs. MFS Charter Income | European Equity vs. Nuveen New York | European Equity vs. Western Asset High |
| Nuveen New vs. Western Asset Municipal | Nuveen New vs. Nuveen Massachusetts Quality | Nuveen New vs. Fiera Capital | Nuveen New vs. European Equity Closed |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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