Correlation Between Westwood Largecap and Nuveen Santa
Can any of the company-specific risk be diversified away by investing in both Westwood Largecap and Nuveen Santa 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 Westwood Largecap and Nuveen Santa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Westwood Largecap Value and Nuveen Santa Barbara, you can compare the effects of market volatilities on Westwood Largecap and Nuveen Santa 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 Westwood Largecap with a short position of Nuveen Santa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Westwood Largecap and Nuveen Santa.
Diversification Opportunities for Westwood Largecap and Nuveen Santa
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Westwood and Nuveen is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Westwood Largecap Value and Nuveen Santa Barbara in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Santa Barbara and Westwood Largecap 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 Westwood Largecap Value are associated (or correlated) with Nuveen Santa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Santa Barbara has no effect on the direction of Westwood Largecap i.e., Westwood Largecap and Nuveen Santa go up and down completely randomly.
Pair Corralation between Westwood Largecap and Nuveen Santa
Assuming the 90 days horizon Westwood Largecap is expected to generate 2.57 times less return on investment than Nuveen Santa. In addition to that, Westwood Largecap is 1.06 times more volatile than Nuveen Santa Barbara. It trades about 0.02 of its total potential returns per unit of risk. Nuveen Santa Barbara is currently generating about 0.05 per unit of volatility. If you would invest 5,799 in Nuveen Santa Barbara on December 4, 2024 and sell it today you would earn a total of 479.00 from holding Nuveen Santa Barbara or generate 8.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Westwood Largecap Value vs. Nuveen Santa Barbara
Performance |
| Timeline |
| Westwood Largecap Value |
| Nuveen Santa Barbara |
Westwood Largecap and Nuveen Santa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Westwood Largecap and Nuveen Santa
The main advantage of trading using opposite Westwood Largecap and Nuveen Santa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Westwood Largecap position performs unexpectedly, Nuveen Santa 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 Santa will offset losses from the drop in Nuveen Santa's long position.| Westwood Largecap vs. Pimco Energy Tactical | Westwood Largecap vs. Invesco Energy Fund | Westwood Largecap vs. Blackrock All Cap Energy | Westwood Largecap vs. World Energy Fund |
| Nuveen Santa vs. John Hancock Variable | Nuveen Santa vs. Siit Ultra Short | Nuveen Santa vs. Catholic Responsible Investments | Nuveen Santa vs. Cmg Ultra Short |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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