Correlation Between NYSE Composite and Nuveen Intermediate
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Nuveen Intermediate 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 NYSE Composite and Nuveen Intermediate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Nuveen Intermediate Duration, you can compare the effects of market volatilities on NYSE Composite and Nuveen Intermediate 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 NYSE Composite with a short position of Nuveen Intermediate. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Nuveen Intermediate.
Diversification Opportunities for NYSE Composite and Nuveen Intermediate
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NYSE and Nuveen is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Nuveen Intermediate Duration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Intermediate and NYSE Composite 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 NYSE Composite are associated (or correlated) with Nuveen Intermediate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Intermediate has no effect on the direction of NYSE Composite i.e., NYSE Composite and Nuveen Intermediate go up and down completely randomly.
Pair Corralation between NYSE Composite and Nuveen Intermediate
Assuming the 90 days trading horizon NYSE Composite is expected to generate 3.47 times more return on investment than Nuveen Intermediate. However, NYSE Composite is 3.47 times more volatile than Nuveen Intermediate Duration. It trades about 0.08 of its potential returns per unit of risk. Nuveen Intermediate Duration is currently generating about 0.08 per unit of risk. If you would invest 1,544,064 in NYSE Composite on November 27, 2024 and sell it today you would earn a total of 441,856 from holding NYSE Composite or generate 28.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Nuveen Intermediate Duration
Performance |
| Timeline |
NYSE Composite and Nuveen Intermediate Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Nuveen Intermediate Duration
Pair trading matchups for Nuveen Intermediate
Pair Trading with NYSE Composite and Nuveen Intermediate
The main advantage of trading using opposite NYSE Composite and Nuveen Intermediate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Nuveen Intermediate 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 Intermediate will offset losses from the drop in Nuveen Intermediate's long position.| NYSE Composite vs. Unum Group | NYSE Composite vs. Palomar Holdings | NYSE Composite vs. Fidelity National Financial | NYSE Composite vs. ZW Data Action |
| Nuveen Intermediate vs. Elfun Diversified Fund | Nuveen Intermediate vs. Diversified Real Asset | Nuveen Intermediate vs. Principal Lifetime Hybrid | Nuveen Intermediate vs. Aqr Diversified Arbitrage |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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