Correlation Between SPDR SP and Nuveen Mortgage
Can any of the company-specific risk be diversified away by investing in both SPDR SP and Nuveen Mortgage 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 SPDR SP and Nuveen Mortgage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR SP 500 and Nuveen Mortgage Opportunity, you can compare the effects of market volatilities on SPDR SP and Nuveen Mortgage 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 SPDR SP with a short position of Nuveen Mortgage. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR SP and Nuveen Mortgage.
Diversification Opportunities for SPDR SP and Nuveen Mortgage
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between SPDR and Nuveen is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding SPDR SP 500 and Nuveen Mortgage Opportunity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Mortgage Oppo and SPDR SP 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 SPDR SP 500 are associated (or correlated) with Nuveen Mortgage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Mortgage Oppo has no effect on the direction of SPDR SP i.e., SPDR SP and Nuveen Mortgage go up and down completely randomly.
Pair Corralation between SPDR SP and Nuveen Mortgage
If you would invest 0.00 in Nuveen Mortgage Opportunity on August 24, 2024 and sell it today you would earn a total of 0.00 from holding Nuveen Mortgage Opportunity or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR SP 500 vs. Nuveen Mortgage Opportunity
Performance |
| Timeline |
| SPDR SP 500 |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Nuveen Mortgage Oppo |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
SPDR SP and Nuveen Mortgage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR SP and Nuveen Mortgage
The main advantage of trading using opposite SPDR SP and Nuveen Mortgage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR SP position performs unexpectedly, Nuveen Mortgage 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 Mortgage will offset losses from the drop in Nuveen Mortgage's long position.The idea behind SPDR SP 500 and Nuveen Mortgage Opportunity pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Nuveen Mortgage vs. Eaton Vance National | Nuveen Mortgage vs. Western Asset Investment | Nuveen Mortgage vs. MFS Municipal Income |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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