Correlation Between Nuveen Intermediate and Ivy Energy
Can any of the company-specific risk be diversified away by investing in both Nuveen Intermediate and Ivy Energy 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 Intermediate and Ivy Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nuveen Intermediate Duration and Ivy Energy Fund, you can compare the effects of market volatilities on Nuveen Intermediate and Ivy Energy 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 Intermediate with a short position of Ivy Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuveen Intermediate and Ivy Energy.
Diversification Opportunities for Nuveen Intermediate and Ivy Energy
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Nuveen and Ivy is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen Intermediate Duration and Ivy Energy Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ivy Energy Fund and Nuveen Intermediate 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 Intermediate Duration are associated (or correlated) with Ivy Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ivy Energy Fund has no effect on the direction of Nuveen Intermediate i.e., Nuveen Intermediate and Ivy Energy go up and down completely randomly.
Pair Corralation between Nuveen Intermediate and Ivy Energy
Assuming the 90 days horizon Nuveen Intermediate is expected to generate 1.62 times less return on investment than Ivy Energy. But when comparing it to its historical volatility, Nuveen Intermediate Duration is 3.75 times less risky than Ivy Energy. It trades about 0.14 of its potential returns per unit of risk. Ivy Energy Fund is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,010 in Ivy Energy Fund on September 3, 2024 and sell it today you would earn a total of 12.00 from holding Ivy Energy Fund or generate 1.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nuveen Intermediate Duration vs. Ivy Energy Fund
Performance |
| Timeline |
| Nuveen Intermediate |
| Ivy Energy Fund |
Nuveen Intermediate and Ivy Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nuveen Intermediate and Ivy Energy
The main advantage of trading using opposite Nuveen Intermediate and Ivy Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuveen Intermediate position performs unexpectedly, Ivy Energy 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 Ivy Energy will offset losses from the drop in Ivy Energy's long position.The idea behind Nuveen Intermediate Duration and Ivy Energy Fund pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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