Correlation Between IShares Core and Nuveen Small
Can any of the company-specific risk be diversified away by investing in both IShares Core and Nuveen Small 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 IShares Core and Nuveen Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Core SP and Nuveen Small Cap, you can compare the effects of market volatilities on IShares Core and Nuveen Small 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 IShares Core with a short position of Nuveen Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Core and Nuveen Small.
Diversification Opportunities for IShares Core and Nuveen Small
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between IShares and Nuveen is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding iShares Core SP and Nuveen Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Small Cap and IShares Core 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 iShares Core SP are associated (or correlated) with Nuveen Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Small Cap has no effect on the direction of IShares Core i.e., IShares Core and Nuveen Small go up and down completely randomly.
Pair Corralation between IShares Core and Nuveen Small
Considering the 90-day investment horizon IShares Core is expected to generate 1.09 times less return on investment than Nuveen Small. But when comparing it to its historical volatility, iShares Core SP is 1.01 times less risky than Nuveen Small. It trades about 0.25 of its potential returns per unit of risk. Nuveen Small Cap is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 2,808 in Nuveen Small Cap on August 30, 2024 and sell it today you would earn a total of 282.00 from holding Nuveen Small Cap or generate 10.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Core SP vs. Nuveen Small Cap
Performance |
| Timeline |
| iShares Core SP |
| Nuveen Small Cap |
IShares Core and Nuveen Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Core and Nuveen Small
The main advantage of trading using opposite IShares Core and Nuveen Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Core position performs unexpectedly, Nuveen Small 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 Small will offset losses from the drop in Nuveen Small's long position.| IShares Core vs. iShares Core SP | IShares Core vs. iShares Core SP | IShares Core vs. iShares SP Small Cap | IShares Core vs. iShares SP 500 |
| Nuveen Small vs. Dimensional ETF Trust | Nuveen Small vs. Vanguard Small Cap Index | Nuveen Small vs. First Trust Multi Manager | Nuveen Small vs. Vanguard SP Small Cap |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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