Correlation Between Nuveen Global and Vanguard Emerging
Can any of the company-specific risk be diversified away by investing in both Nuveen Global and Vanguard Emerging 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 Vanguard Emerging 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 Vanguard Emerging Markets, you can compare the effects of market volatilities on Nuveen Global and Vanguard Emerging 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 Vanguard Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuveen Global and Vanguard Emerging.
Diversification Opportunities for Nuveen Global and Vanguard Emerging
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Nuveen and Vanguard is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen Global Real and Vanguard Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Emerging Markets 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 Vanguard Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Emerging Markets has no effect on the direction of Nuveen Global i.e., Nuveen Global and Vanguard Emerging go up and down completely randomly.
Pair Corralation between Nuveen Global and Vanguard Emerging
Assuming the 90 days horizon Nuveen Global Real is expected to generate 0.94 times more return on investment than Vanguard Emerging. However, Nuveen Global Real is 1.07 times less risky than Vanguard Emerging. It trades about 0.06 of its potential returns per unit of risk. Vanguard Emerging Markets is currently generating about -0.2 per unit of risk. If you would invest 1,943 in Nuveen Global Real on August 30, 2024 and sell it today you would earn a total of 18.00 from holding Nuveen Global Real or generate 0.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Nuveen Global Real vs. Vanguard Emerging Markets
Performance |
| Timeline |
| Nuveen Global Real |
| Vanguard Emerging Markets |
Nuveen Global and Vanguard Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nuveen Global and Vanguard Emerging
The main advantage of trading using opposite Nuveen Global and Vanguard Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuveen Global position performs unexpectedly, Vanguard Emerging 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 Vanguard Emerging will offset losses from the drop in Vanguard Emerging's long position.| Nuveen Global vs. Old Westbury Short Term | Nuveen Global vs. Vanguard Short Term Federal | Nuveen Global vs. Calvert Short Duration | Nuveen Global vs. Astor Longshort Fund |
| Vanguard Emerging vs. Vanguard Multi Sector Income | Vanguard Emerging vs. Vanguard Mid Cap Value | Vanguard Emerging vs. Vanguard Mid Cap Value | Vanguard Emerging vs. Vanguard Global Minimum |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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