Correlation Between Nuveen Dow and Nuveen Mid
Can any of the company-specific risk be diversified away by investing in both Nuveen Dow and Nuveen Mid 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 Nuveen Dow and Nuveen Mid into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nuveen Dow 30 and Nuveen Mid Cap, you can compare the effects of market volatilities on Nuveen Dow and Nuveen Mid 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 Nuveen Dow with a short position of Nuveen Mid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuveen Dow and Nuveen Mid.
Diversification Opportunities for Nuveen Dow and Nuveen Mid
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Nuveen and Nuveen is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen Dow 30 and Nuveen Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Mid Cap and Nuveen Dow 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 Nuveen Dow 30 are associated (or correlated) with Nuveen Mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Mid Cap has no effect on the direction of Nuveen Dow i.e., Nuveen Dow and Nuveen Mid go up and down completely randomly.
Pair Corralation between Nuveen Dow and Nuveen Mid
Assuming the 90 days horizon Nuveen Dow 30 is expected to generate 0.78 times more return on investment than Nuveen Mid. However, Nuveen Dow 30 is 1.28 times less risky than Nuveen Mid. It trades about 0.42 of its potential returns per unit of risk. Nuveen Mid Cap is currently generating about 0.23 per unit of risk. If you would invest 1,668 in Nuveen Dow 30 on November 3, 2024 and sell it today you would earn a total of 89.00 from holding Nuveen Dow 30 or generate 5.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Nuveen Dow 30 vs. Nuveen Mid Cap
Performance |
| Timeline |
| Nuveen Dow 30 |
| Nuveen Mid Cap |
Nuveen Dow and Nuveen Mid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nuveen Dow and Nuveen Mid
The main advantage of trading using opposite Nuveen Dow and Nuveen Mid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuveen Dow position performs unexpectedly, Nuveen Mid 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 Mid will offset losses from the drop in Nuveen Mid's long position.| Nuveen Dow vs. Texton Property | Nuveen Dow vs. Columbia Real Estate | Nuveen Dow vs. Nexpoint Real Estate | Nuveen Dow vs. Redwood Real Estate |
| Nuveen Mid vs. Pace High Yield | Nuveen Mid vs. Ironclad Managed Risk | Nuveen Mid vs. Massmutual Premier High | Nuveen Mid vs. Us High Relative |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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