Correlation Between SPDR SP and Nuveen Sustainable
Can any of the company-specific risk be diversified away by investing in both SPDR SP and Nuveen Sustainable 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 Sustainable 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 Sustainable Core, you can compare the effects of market volatilities on SPDR SP and Nuveen Sustainable 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 Sustainable. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR SP and Nuveen Sustainable.
Diversification Opportunities for SPDR SP and Nuveen Sustainable
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between SPDR and Nuveen is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding SPDR SP 500 and Nuveen Sustainable Core in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Sustainable Core 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 Sustainable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Sustainable Core has no effect on the direction of SPDR SP i.e., SPDR SP and Nuveen Sustainable go up and down completely randomly.
Pair Corralation between SPDR SP and Nuveen Sustainable
Considering the 90-day investment horizon SPDR SP 500 is expected to generate 1.0 times more return on investment than Nuveen Sustainable. However, SPDR SP is 1.0 times more volatile than Nuveen Sustainable Core. It trades about 0.14 of its potential returns per unit of risk. Nuveen Sustainable Core is currently generating about 0.11 per unit of risk. If you would invest 52,449 in SPDR SP 500 on September 1, 2024 and sell it today you would earn a total of 7,806 from holding SPDR SP 500 or generate 14.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.21% |
| Values | Daily Returns |
SPDR SP 500 vs. Nuveen Sustainable Core
Performance |
| Timeline |
| SPDR SP 500 |
| Nuveen Sustainable Core |
SPDR SP and Nuveen Sustainable Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR SP and Nuveen Sustainable
The main advantage of trading using opposite SPDR SP and Nuveen Sustainable positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR SP position performs unexpectedly, Nuveen Sustainable 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 Sustainable will offset losses from the drop in Nuveen Sustainable's long position.| SPDR SP vs. Vanguard Total Stock | SPDR SP vs. Vanguard FTSE Emerging | SPDR SP vs. FT Vest Equity | SPDR SP vs. Zillow Group Class |
| Nuveen Sustainable vs. FT Vest Equity | Nuveen Sustainable vs. Northern Lights | Nuveen Sustainable vs. Dimensional International High | Nuveen Sustainable vs. Matthews China Discovery |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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