Correlation Between Nasdaq 100 and Nuveen Small
Can any of the company-specific risk be diversified away by investing in both Nasdaq 100 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 Nasdaq 100 and Nuveen Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nasdaq 100 Index Fund and Nuveen Small Cap, you can compare the effects of market volatilities on Nasdaq 100 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 Nasdaq 100 with a short position of Nuveen Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq 100 and Nuveen Small.
Diversification Opportunities for Nasdaq 100 and Nuveen Small
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Nasdaq and Nuveen is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq 100 Index Fund 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 Nasdaq 100 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 Nasdaq 100 Index Fund 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 Nasdaq 100 i.e., Nasdaq 100 and Nuveen Small go up and down completely randomly.
Pair Corralation between Nasdaq 100 and Nuveen Small
Assuming the 90 days horizon Nasdaq 100 Index Fund is expected to under-perform the Nuveen Small. In addition to that, Nasdaq 100 is 1.88 times more volatile than Nuveen Small Cap. It trades about -0.12 of its total potential returns per unit of risk. Nuveen Small Cap is currently generating about -0.05 per unit of volatility. If you would invest 1,671 in Nuveen Small Cap on September 12, 2024 and sell it today you would lose (19.00) from holding Nuveen Small Cap or give up 1.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Nasdaq 100 Index Fund vs. Nuveen Small Cap
Performance |
| Timeline |
| Nasdaq 100 Index |
| Nuveen Small Cap |
Nasdaq 100 and Nuveen Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nasdaq 100 and Nuveen Small
The main advantage of trading using opposite Nasdaq 100 and Nuveen Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nasdaq 100 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.| Nasdaq 100 vs. Nasdaq 100 Index Fund | Nasdaq 100 vs. Nasdaq 100 Index Fund | Nasdaq 100 vs. Fidelity Zero Large | Nasdaq 100 vs. Vanguard Russell 2000 |
| Nuveen Small vs. Sp Midcap Index | Nuveen Small vs. Sp 500 Index | Nuveen Small vs. Nasdaq 100 Index Fund | Nuveen Small vs. Deutsche Sp 500 |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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