Correlation Between US Treasury and Nuveen ESG
Can any of the company-specific risk be diversified away by investing in both US Treasury and Nuveen ESG 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 US Treasury and Nuveen ESG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between US Treasury 12 and Nuveen ESG Aggregate, you can compare the effects of market volatilities on US Treasury and Nuveen ESG 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 US Treasury with a short position of Nuveen ESG. Check out your portfolio center. Please also check ongoing floating volatility patterns of US Treasury and Nuveen ESG.
Diversification Opportunities for US Treasury and Nuveen ESG
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between OBIL and Nuveen is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding US Treasury 12 and Nuveen ESG Aggregate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen ESG Aggregate and US Treasury 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 US Treasury 12 are associated (or correlated) with Nuveen ESG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen ESG Aggregate has no effect on the direction of US Treasury i.e., US Treasury and Nuveen ESG go up and down completely randomly.
Pair Corralation between US Treasury and Nuveen ESG
Given the investment horizon of 90 days US Treasury 12 is expected to generate 0.12 times more return on investment than Nuveen ESG. However, US Treasury 12 is 8.49 times less risky than Nuveen ESG. It trades about 0.46 of its potential returns per unit of risk. Nuveen ESG Aggregate is currently generating about 0.0 per unit of risk. If you would invest 4,995 in US Treasury 12 on October 25, 2024 and sell it today you would earn a total of 17.50 from holding US Treasury 12 or generate 0.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
US Treasury 12 vs. Nuveen ESG Aggregate
Performance |
| Timeline |
| US Treasury 12 |
| Nuveen ESG Aggregate |
US Treasury and Nuveen ESG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with US Treasury and Nuveen ESG
The main advantage of trading using opposite US Treasury and Nuveen ESG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if US Treasury position performs unexpectedly, Nuveen ESG 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 ESG will offset losses from the drop in Nuveen ESG's long position.| US Treasury vs. Rbb Fund | US Treasury vs. Rbb Fund | US Treasury vs. Rbb Fund | US Treasury vs. US Treasury 6 |
| Nuveen ESG vs. NuShares Enhanced Yield | Nuveen ESG vs. NuShares ETF Trust | Nuveen ESG vs. Nuveen ESG Small Cap | Nuveen ESG vs. Nuveen ESG Large Cap |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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