Correlation Between Nuveen Strategic and Small Cap
Can any of the company-specific risk be diversified away by investing in both Nuveen Strategic and Small Cap 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 Strategic and Small Cap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nuveen Strategic Municipal and Small Cap Equity, you can compare the effects of market volatilities on Nuveen Strategic and Small Cap 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 Strategic with a short position of Small Cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuveen Strategic and Small Cap.
Diversification Opportunities for Nuveen Strategic and Small Cap
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Nuveen and Small is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen Strategic Municipal and Small Cap Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Small Cap Equity and Nuveen Strategic 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 Strategic Municipal are associated (or correlated) with Small Cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Small Cap Equity has no effect on the direction of Nuveen Strategic i.e., Nuveen Strategic and Small Cap go up and down completely randomly.
Pair Corralation between Nuveen Strategic and Small Cap
Assuming the 90 days horizon Nuveen Strategic is expected to generate 1.99 times less return on investment than Small Cap. But when comparing it to its historical volatility, Nuveen Strategic Municipal is 5.33 times less risky than Small Cap. It trades about 0.11 of its potential returns per unit of risk. Small Cap Equity is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,692 in Small Cap Equity on November 5, 2024 and sell it today you would earn a total of 182.00 from holding Small Cap Equity or generate 10.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nuveen Strategic Municipal vs. Small Cap Equity
Performance |
| Timeline |
| Nuveen Strategic Mun |
| Small Cap Equity |
Nuveen Strategic and Small Cap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nuveen Strategic and Small Cap
The main advantage of trading using opposite Nuveen Strategic and Small Cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuveen Strategic position performs unexpectedly, Small Cap 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 Small Cap will offset losses from the drop in Small Cap's long position.| Nuveen Strategic vs. Sei Daily Income | Nuveen Strategic vs. Morgan Stanley Institutional | Nuveen Strategic vs. Us Government Securities | Nuveen Strategic vs. Oklahoma Municipal Fund |
| Small Cap vs. Mirova Global Green | Small Cap vs. Bbh Intermediate Municipal | Small Cap vs. Massmutual Premier High | Small Cap vs. Blrc Sgy Mnp |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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