Correlation Between Nuveen Small and First Trust/confluence
Can any of the company-specific risk be diversified away by investing in both Nuveen Small and First Trust/confluence 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 Small and First Trust/confluence into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nuveen Small Cap and First Trustconfluence Small, you can compare the effects of market volatilities on Nuveen Small and First Trust/confluence 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 Small with a short position of First Trust/confluence. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuveen Small and First Trust/confluence.
Diversification Opportunities for Nuveen Small and First Trust/confluence
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Nuveen and First is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen Small Cap and First Trustconfluence Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust/confluence and Nuveen Small 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 Small Cap are associated (or correlated) with First Trust/confluence. 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/confluence has no effect on the direction of Nuveen Small i.e., Nuveen Small and First Trust/confluence go up and down completely randomly.
Pair Corralation between Nuveen Small and First Trust/confluence
Assuming the 90 days horizon Nuveen Small Cap is expected to generate 1.27 times more return on investment than First Trust/confluence. However, Nuveen Small is 1.27 times more volatile than First Trustconfluence Small. It trades about 0.27 of its potential returns per unit of risk. First Trustconfluence Small is currently generating about 0.21 per unit of risk. If you would invest 3,515 in Nuveen Small Cap on September 5, 2024 and sell it today you would earn a total of 334.00 from holding Nuveen Small Cap or generate 9.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nuveen Small Cap vs. First Trustconfluence Small
Performance |
| Timeline |
| Nuveen Small Cap |
| First Trust/confluence |
Nuveen Small and First Trust/confluence Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nuveen Small and First Trust/confluence
The main advantage of trading using opposite Nuveen Small and First Trust/confluence positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuveen Small position performs unexpectedly, First Trust/confluence 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/confluence will offset losses from the drop in First Trust/confluence's long position.| Nuveen Small vs. Nuveen Small Cap | Nuveen Small vs. Small Pany Growth | Nuveen Small vs. Emerald Growth Fund | Nuveen Small vs. Emerald Growth Fund |
| First Trust/confluence vs. Nuveen Small Cap | First Trust/confluence vs. Emerald Growth Fund | First Trust/confluence vs. Emerald Growth Fund | First Trust/confluence vs. Emerald Growth Fund |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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