Correlation Between IShares Russell and Nuveen Small
Can any of the company-specific risk be diversified away by investing in both IShares Russell 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 Russell 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 Russell 2000 and Nuveen Small Cap, you can compare the effects of market volatilities on IShares Russell 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 Russell with a short position of Nuveen Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Russell and Nuveen Small.
Diversification Opportunities for IShares Russell 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 Russell 2000 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 Russell 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 Russell 2000 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 Russell i.e., IShares Russell and Nuveen Small go up and down completely randomly.
Pair Corralation between IShares Russell and Nuveen Small
Considering the 90-day investment horizon IShares Russell is expected to generate 1.11 times less return on investment than Nuveen Small. In addition to that, IShares Russell is 1.09 times more volatile than Nuveen Small Cap. It trades about 0.07 of its total potential returns per unit of risk. Nuveen Small Cap is currently generating about 0.09 per unit of volatility. If you would invest 2,094 in Nuveen Small Cap on August 30, 2024 and sell it today you would earn a total of 996.00 from holding Nuveen Small Cap or generate 47.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.75% |
| Values | Daily Returns |
iShares Russell 2000 vs. Nuveen Small Cap
Performance |
| Timeline |
| iShares Russell 2000 |
| Nuveen Small Cap |
IShares Russell and Nuveen Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Russell and Nuveen Small
The main advantage of trading using opposite IShares Russell and Nuveen Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Russell 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 Russell vs. Vanguard Mid Cap Index | IShares Russell vs. Vanguard Small Cap Value | IShares Russell vs. Vanguard FTSE Emerging | IShares Russell vs. Vanguard Large Cap Index |
| 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Stocks Directory Find actively traded stocks across global markets |