Correlation Between Nuveen Short-duration and Nuveen Small
Can any of the company-specific risk be diversified away by investing in both Nuveen Short-duration 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 Nuveen Short-duration and Nuveen Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nuveen Short Duration High and Nuveen Small Cap, you can compare the effects of market volatilities on Nuveen Short-duration 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 Nuveen Short-duration with a short position of Nuveen Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuveen Short-duration and Nuveen Small.
Diversification Opportunities for Nuveen Short-duration and Nuveen Small
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Nuveen and Nuveen is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen Short Duration High 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 Nuveen Short-duration 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 Short Duration High 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 Nuveen Short-duration i.e., Nuveen Short-duration and Nuveen Small go up and down completely randomly.
Pair Corralation between Nuveen Short-duration and Nuveen Small
Assuming the 90 days horizon Nuveen Short-duration is expected to generate 20.93 times less return on investment than Nuveen Small. But when comparing it to its historical volatility, Nuveen Short Duration High is 7.08 times less risky than Nuveen Small. It trades about 0.06 of its potential returns per unit of risk. Nuveen Small Cap is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 1,045 in Nuveen Small Cap on August 25, 2024 and sell it today you would earn a total of 116.00 from holding Nuveen Small Cap or generate 11.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nuveen Short Duration High vs. Nuveen Small Cap
Performance |
| Timeline |
| Nuveen Short Duration |
| Nuveen Small Cap |
Nuveen Short-duration and Nuveen Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nuveen Short-duration and Nuveen Small
The main advantage of trading using opposite Nuveen Short-duration and Nuveen Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuveen Short-duration 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.| Nuveen Short-duration vs. Nuveen Small Cap | Nuveen Short-duration vs. Nuveen Real Estate | Nuveen Short-duration vs. Nuveen Real Estate | Nuveen Short-duration vs. Nuveen Preferred Securities |
| Nuveen Small vs. Nuveen Real Estate | Nuveen Small vs. Nuveen Real Estate | Nuveen Small vs. Nuveen Preferred Securities | Nuveen Small vs. Nuveen Preferred Securities |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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