Correlation Between IShares MSCI and Nuveen Growth
Can any of the company-specific risk be diversified away by investing in both IShares MSCI and Nuveen Growth 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 MSCI and Nuveen Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares MSCI USA and Nuveen Growth Opportunities, you can compare the effects of market volatilities on IShares MSCI and Nuveen Growth 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 MSCI with a short position of Nuveen Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares MSCI and Nuveen Growth.
Diversification Opportunities for IShares MSCI and Nuveen Growth
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between IShares and Nuveen is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding iShares MSCI USA and Nuveen Growth Opportunities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Growth Opport and IShares MSCI 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 MSCI USA are associated (or correlated) with Nuveen Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Growth Opport has no effect on the direction of IShares MSCI i.e., IShares MSCI and Nuveen Growth go up and down completely randomly.
Pair Corralation between IShares MSCI and Nuveen Growth
Given the investment horizon of 90 days iShares MSCI USA is expected to generate 0.87 times more return on investment than Nuveen Growth. However, iShares MSCI USA is 1.15 times less risky than Nuveen Growth. It trades about 0.11 of its potential returns per unit of risk. Nuveen Growth Opportunities is currently generating about 0.08 per unit of risk. If you would invest 18,568 in iShares MSCI USA on September 1, 2024 and sell it today you would earn a total of 3,084 from holding iShares MSCI USA or generate 16.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares MSCI USA vs. Nuveen Growth Opportunities
Performance |
| Timeline |
| iShares MSCI USA |
| Nuveen Growth Opport |
IShares MSCI and Nuveen Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares MSCI and Nuveen Growth
The main advantage of trading using opposite IShares MSCI and Nuveen Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares MSCI position performs unexpectedly, Nuveen Growth 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 Growth will offset losses from the drop in Nuveen Growth's long position.| IShares MSCI vs. iShares MSCI USA | IShares MSCI vs. iShares MSCI USA | IShares MSCI vs. iShares MSCI USA | IShares MSCI vs. iShares Expanded Tech Software |
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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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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