Correlation Between Nuveen NASDAQ and Nuveen SP
Can any of the company-specific risk be diversified away by investing in both Nuveen NASDAQ and Nuveen SP 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 NASDAQ and Nuveen SP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nuveen NASDAQ 100 and Nuveen SP 500, you can compare the effects of market volatilities on Nuveen NASDAQ and Nuveen SP 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 NASDAQ with a short position of Nuveen SP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuveen NASDAQ and Nuveen SP.
Diversification Opportunities for Nuveen NASDAQ and Nuveen SP
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Nuveen and Nuveen is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen NASDAQ 100 and Nuveen SP 500 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen SP 500 and Nuveen NASDAQ 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 NASDAQ 100 are associated (or correlated) with Nuveen SP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen SP 500 has no effect on the direction of Nuveen NASDAQ i.e., Nuveen NASDAQ and Nuveen SP go up and down completely randomly.
Pair Corralation between Nuveen NASDAQ and Nuveen SP
Given the investment horizon of 90 days Nuveen NASDAQ is expected to generate 1.4 times less return on investment than Nuveen SP. In addition to that, Nuveen NASDAQ is 1.3 times more volatile than Nuveen SP 500. It trades about 0.1 of its total potential returns per unit of risk. Nuveen SP 500 is currently generating about 0.18 per unit of volatility. If you would invest 1,691 in Nuveen SP 500 on August 27, 2024 and sell it today you would earn a total of 42.00 from holding Nuveen SP 500 or generate 2.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nuveen NASDAQ 100 vs. Nuveen SP 500
Performance |
| Timeline |
| Nuveen NASDAQ 100 |
| Nuveen SP 500 |
Nuveen NASDAQ and Nuveen SP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nuveen NASDAQ and Nuveen SP
The main advantage of trading using opposite Nuveen NASDAQ and Nuveen SP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuveen NASDAQ position performs unexpectedly, Nuveen SP 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 SP will offset losses from the drop in Nuveen SP's long position.| Nuveen NASDAQ vs. BlackRock Science and | Nuveen NASDAQ vs. BlackRock Health Sciences | Nuveen NASDAQ vs. BlackRock Health Sciences | Nuveen NASDAQ vs. Cohen Steers Qualityome |
| Nuveen SP vs. Nuveen SP 500 | Nuveen SP vs. Voya Global Equity | Nuveen SP vs. Nuveen NASDAQ 100 | Nuveen SP vs. Nuveen Real Asset |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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