Correlation Between Nuveen Dividend and Nuveen High

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

By analyzing existing cross correlation between Nuveen Dividend Value and Nuveen High Income, you can compare the effects of market volatilities on Nuveen Dividend and Nuveen High 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 Dividend with a short position of Nuveen High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuveen Dividend and Nuveen High.

Diversification Opportunities for Nuveen Dividend and Nuveen High

0.85

Correlation Coefficient

Nuveen Dividend  Nuveen High

Very poor diversification

The 3 months correlation between Nuveen and Nuveen is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen Dividend Value and Nuveen High Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen High Income and Nuveen Dividend 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 Dividend Value are associated (or correlated) with Nuveen High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen High Income has no effect on the direction of Nuveen Dividend i.e., Nuveen Dividend and Nuveen High go up and down completely randomly.

Pair Corralation between Nuveen Dividend and Nuveen High

Assuming the 90 days horizon Nuveen Dividend Value is expected to generate 3.01 times more return on investment than Nuveen High. However, Nuveen Dividend is 3.01 times more volatile than Nuveen High Income. It trades about 0.1 of its potential returns per unit of risk. Nuveen High Income is currently generating about 0.24 per unit of risk. If you would invest  1,388  in Nuveen Dividend Value on September 4, 2024 and sell it today you would earn a total of  268.00  from holding Nuveen Dividend Value or generate 19.31% return on investment over 90 days.

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

Nuveen Dividend Value  vs.  Nuveen High Income

Nuveen Dividend Value

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Nuveen Dividend Value are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Nuveen Dividend is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Nuveen High Income

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Nuveen High Income are ranked lower than 19 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Nuveen High 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 Dividend and Nuveen High

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

The idea behind Nuveen Dividend Value and Nuveen High Income 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.

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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.