Correlation Between Nuveen Global and American Funds
Can any of the company-specific risk be diversified away by investing in both Nuveen Global and American Funds 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 Global and American Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nuveen Global Real and American Funds 2050, you can compare the effects of market volatilities on Nuveen Global and American Funds 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 Global with a short position of American Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuveen Global and American Funds.
Diversification Opportunities for Nuveen Global and American Funds
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nuveen and American is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen Global Real and American Funds 2050 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Funds 2050 and Nuveen Global 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 Global Real are associated (or correlated) with American Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Funds 2050 has no effect on the direction of Nuveen Global i.e., Nuveen Global and American Funds go up and down completely randomly.
Pair Corralation between Nuveen Global and American Funds
Assuming the 90 days horizon Nuveen Global Real is expected to under-perform the American Funds. In addition to that, Nuveen Global is 1.3 times more volatile than American Funds 2050. It trades about -0.09 of its total potential returns per unit of risk. American Funds 2050 is currently generating about 0.04 per unit of volatility. If you would invest 2,158 in American Funds 2050 on August 31, 2024 and sell it today you would earn a total of 18.00 from holding American Funds 2050 or generate 0.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nuveen Global Real vs. American Funds 2050
Performance |
| Timeline |
| Nuveen Global Real |
| American Funds 2050 |
Nuveen Global and American Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nuveen Global and American Funds
The main advantage of trading using opposite Nuveen Global and American Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuveen Global position performs unexpectedly, American Funds 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 American Funds will offset losses from the drop in American Funds' long position.| Nuveen Global vs. Pgim Conservative Retirement | Nuveen Global vs. American Funds Conservative | Nuveen Global vs. Fidelity Advisor Diversified | Nuveen Global vs. Jhancock Diversified Macro |
| American Funds vs. Applied Finance Explorer | American Funds vs. Columbia Small Cap | American Funds vs. Queens Road Small | American Funds vs. American Century Etf |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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