Correlation Between Nuveen Short-duration and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Nuveen Short-duration and Dow Jones 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 Dow Jones 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 Dow Jones Industrial, you can compare the effects of market volatilities on Nuveen Short-duration and Dow Jones 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 Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuveen Short-duration and Dow Jones.
Diversification Opportunities for Nuveen Short-duration and Dow Jones
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Nuveen and Dow is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen Short Duration High and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial 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 Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Nuveen Short-duration i.e., Nuveen Short-duration and Dow Jones go up and down completely randomly.
Pair Corralation between Nuveen Short-duration and Dow Jones
Assuming the 90 days horizon Nuveen Short-duration is expected to generate 7.89 times less return on investment than Dow Jones. But when comparing it to its historical volatility, Nuveen Short Duration High is 3.69 times less risky than Dow Jones. It trades about 0.06 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 4,220,822 in Dow Jones Industrial on August 25, 2024 and sell it today you would earn a total of 208,829 from holding Dow Jones Industrial or generate 4.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nuveen Short Duration High vs. Dow Jones Industrial
Performance |
| Timeline |
Nuveen Short-duration and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Nuveen Short Duration High
Pair trading matchups for Nuveen Short-duration
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Nuveen Short-duration and Dow Jones
The main advantage of trading using opposite Nuveen Short-duration and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuveen Short-duration position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| Nuveen Short-duration vs. Alphacentric Lifesci Healthcare | Nuveen Short-duration vs. Alger Health Sciences | Nuveen Short-duration vs. Baron Health Care | Nuveen Short-duration vs. The Gabelli Healthcare |
| Dow Jones vs. Vistra Energy Corp | Dow Jones vs. Fluence Energy | Dow Jones vs. Old Republic International | Dow Jones vs. Empresa Distribuidora y |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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