Correlation Between Small Cap and Nuveen Strategic
Can any of the company-specific risk be diversified away by investing in both Small Cap and Nuveen Strategic 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 Small Cap and Nuveen Strategic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Small Cap Stock and Nuveen Strategic Income, you can compare the effects of market volatilities on Small Cap and Nuveen Strategic 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 Small Cap with a short position of Nuveen Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Small Cap and Nuveen Strategic.
Diversification Opportunities for Small Cap and Nuveen Strategic
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Small and Nuveen is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Small Cap Stock and Nuveen Strategic Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Strategic Income and Small Cap 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 Small Cap Stock are associated (or correlated) with Nuveen Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Strategic Income has no effect on the direction of Small Cap i.e., Small Cap and Nuveen Strategic go up and down completely randomly.
Pair Corralation between Small Cap and Nuveen Strategic
Assuming the 90 days horizon Small Cap Stock is expected to generate 6.76 times more return on investment than Nuveen Strategic. However, Small Cap is 6.76 times more volatile than Nuveen Strategic Income. It trades about 0.23 of its potential returns per unit of risk. Nuveen Strategic Income is currently generating about 0.15 per unit of risk. If you would invest 1,416 in Small Cap Stock on August 30, 2024 and sell it today you would earn a total of 122.00 from holding Small Cap Stock or generate 8.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Small Cap Stock vs. Nuveen Strategic Income
Performance |
| Timeline |
| Small Cap Stock |
| Nuveen Strategic Income |
Small Cap and Nuveen Strategic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Small Cap and Nuveen Strategic
The main advantage of trading using opposite Small Cap and Nuveen Strategic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Small Cap position performs unexpectedly, Nuveen Strategic 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 Strategic will offset losses from the drop in Nuveen Strategic's long position.| Small Cap vs. Franklin Adjustable Government | Small Cap vs. Dreyfus Government Cash | Small Cap vs. Lord Abbett Government | Small Cap vs. Inverse Government Long |
| Nuveen Strategic vs. Ultra Short Fixed Income | Nuveen Strategic vs. Blrc Sgy Mnp | Nuveen Strategic vs. Icon Bond Fund | Nuveen Strategic vs. Ambrus Core Bond |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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