Correlation Between Nuveen All and Nuveen Real

Can any of the company-specific risk be diversified away by investing in both Nuveen All and Nuveen Real 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 All and Nuveen Real into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Nuveen All American Municipal and Nuveen Real Estate, you can compare the effects of market volatilities on Nuveen All and Nuveen Real 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 All with a short position of Nuveen Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuveen All and Nuveen Real.

Diversification Opportunities for Nuveen All and Nuveen Real

0.38

Correlation Coefficient

Nuveen All  Nuveen Real

Weak diversification

The 3 months correlation between Nuveen and Nuveen is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen All American Municipal and Nuveen Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Real Estate and Nuveen All 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 All American Municipal are associated (or correlated) with Nuveen Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Real Estate has no effect on the direction of Nuveen All i.e., Nuveen All and Nuveen Real go up and down completely randomly.

Pair Corralation between Nuveen All and Nuveen Real

Assuming the 90 days horizon Nuveen All American Municipal is expected to generate 0.25 times more return on investment than Nuveen Real. However, Nuveen All American Municipal is 4.08 times less risky than Nuveen Real. It trades about 0.39 of its potential returns per unit of risk. Nuveen Real Estate is currently generating about 0.0 per unit of risk. If you would invest  1,018  in Nuveen All American Municipal on September 13, 2024 and sell it today you would earn a total of  14.00  from holding Nuveen All American Municipal or generate 1.38% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Nuveen All American Municipal  vs.  Nuveen Real Estate

Nuveen All American

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Nuveen All American Municipal are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Nuveen All is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Nuveen Real Estate

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nuveen Real Estate has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Nuveen Real is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Nuveen All and Nuveen Real

The main advantage of trading using opposite Nuveen All and Nuveen Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuveen All position performs unexpectedly, Nuveen Real 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 Real will offset losses from the drop in Nuveen Real's long position.

The idea behind Nuveen All American Municipal and Nuveen Real Estate 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.