Correlation Between Valic Company and Nuveen New

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Can any of the company-specific risk be diversified away by investing in both Valic Company and Nuveen New 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 Valic Company and Nuveen New into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Valic Company I and Nuveen New Jersey, you can compare the effects of market volatilities on Valic Company and Nuveen New 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 Valic Company with a short position of Nuveen New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Valic Company and Nuveen New.

Diversification Opportunities for Valic Company and Nuveen New

-0.43
  Correlation Coefficient

Very good diversification

The 3 months correlation between Valic and Nuveen is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Valic Company I and Nuveen New Jersey in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen New Jersey and Valic Company 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 Valic Company I are associated (or correlated) with Nuveen New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen New Jersey has no effect on the direction of Valic Company i.e., Valic Company and Nuveen New go up and down completely randomly.

Pair Corralation between Valic Company and Nuveen New

Assuming the 90 days horizon Valic Company I is expected to generate 2.25 times more return on investment than Nuveen New. However, Valic Company is 2.25 times more volatile than Nuveen New Jersey. It trades about 0.07 of its potential returns per unit of risk. Nuveen New Jersey is currently generating about 0.07 per unit of risk. If you would invest  1,021  in Valic Company I on August 27, 2024 and sell it today you would earn a total of  361.00  from holding Valic Company I or generate 35.36% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Valic Company I  vs.  Nuveen New Jersey

 Performance 
       Timeline  
Valic Company I 

Risk-Adjusted Performance

7 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Valic Company I are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Valic Company may actually be approaching a critical reversion point that can send shares even higher in December 2024.
Nuveen New Jersey 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Nuveen New Jersey has generated negative risk-adjusted returns adding no value to fund investors. Even with relatively steady basic indicators, Nuveen New is not utilizing all of its potentials. The current stock price chaos, may contribute to medium-term losses for the stakeholders.

Valic Company and Nuveen New Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Valic Company and Nuveen New

The main advantage of trading using opposite Valic Company and Nuveen New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Valic Company position performs unexpectedly, Nuveen New 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 New will offset losses from the drop in Nuveen New's long position.
The idea behind Valic Company I and Nuveen New Jersey 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.
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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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.

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