Correlation Between Nuveen Real and Kensington Active
Can any of the company-specific risk be diversified away by investing in both Nuveen Real and Kensington Active 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 Real and Kensington Active into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nuveen Real Asset and Kensington Active Advantage, you can compare the effects of market volatilities on Nuveen Real and Kensington Active 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 Real with a short position of Kensington Active. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuveen Real and Kensington Active.
Diversification Opportunities for Nuveen Real and Kensington Active
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Nuveen and Kensington is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen Real Asset and Kensington Active Advantage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kensington Active and Nuveen Real 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 Real Asset are associated (or correlated) with Kensington Active. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kensington Active has no effect on the direction of Nuveen Real i.e., Nuveen Real and Kensington Active go up and down completely randomly.
Pair Corralation between Nuveen Real and Kensington Active
Considering the 90-day investment horizon Nuveen Real Asset is expected to generate 2.08 times more return on investment than Kensington Active. However, Nuveen Real is 2.08 times more volatile than Kensington Active Advantage. It trades about 0.29 of its potential returns per unit of risk. Kensington Active Advantage is currently generating about 0.36 per unit of risk. If you would invest 1,292 in Nuveen Real Asset on September 2, 2024 and sell it today you would earn a total of 69.00 from holding Nuveen Real Asset or generate 5.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nuveen Real Asset vs. Kensington Active Advantage
Performance |
| Timeline |
| Nuveen Real Asset |
| Kensington Active |
Nuveen Real and Kensington Active Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nuveen Real and Kensington Active
The main advantage of trading using opposite Nuveen Real and Kensington Active positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuveen Real position performs unexpectedly, Kensington Active 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 Kensington Active will offset losses from the drop in Kensington Active's long position.| Nuveen Real vs. Eaton Vance Tax | Nuveen Real vs. Eaton Vance Risk | Nuveen Real vs. Eaton Vance Tax | Nuveen Real vs. Eaton Vance Tax |
| Kensington Active vs. Kensington Defender Institutional | Kensington Active vs. Kensington Active Advantage | Kensington Active vs. Kensington Dynamic Growth | Kensington Active vs. Kensington Dynamic Growth |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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