Correlation Between Nuveen Real and Dana Large

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

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

Diversification Opportunities for Nuveen Real and Dana Large

-0.34

Correlation Coefficient

Nuveen Real  Dana Large

Very good diversification

The 3 months correlation between Nuveen and Dana is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen Real Estate and Dana Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dana Large Cap and Nuveen Real 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 Real Estate are associated (or correlated) with Dana Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dana Large Cap has no effect on the direction of Nuveen Real i.e., Nuveen Real and Dana Large go up and down completely randomly.

Pair Corralation between Nuveen Real and Dana Large

Assuming the 90 days horizon Nuveen Real Estate is expected to under-perform the Dana Large. In addition to that, Nuveen Real is 1.08 times more volatile than Dana Large Cap. It trades about -0.07 of its total potential returns per unit of risk. Dana Large Cap is currently generating about 0.18 per unit of volatility. If you would invest  2,506  in Dana Large Cap on September 18, 2024 and sell it today you would earn a total of  211.00  from holding Dana Large Cap or generate 8.42% return on investment over 90 days.

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

Nuveen Real Estate  vs.  Dana Large Cap

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 recent stock price disturbance, may contribute to short-term losses for the investors.

Dana Large Cap

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Dana Large Cap are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Dana Large may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Nuveen Real and Dana Large

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

The idea behind Nuveen Real Estate and Dana Large Cap 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.