Correlation Between Nuveen High and European Equity

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

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

Diversification Opportunities for Nuveen High and European Equity

-0.9

Correlation Coefficient

Nuveen High  European Equity

Pay attention - limited upside

The 3 months correlation between Nuveen and European is -0.9. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen High Income and European Equity Closed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on European Equity Closed and Nuveen High 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 High Income are associated (or correlated) with European Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of European Equity Closed has no effect on the direction of Nuveen High i.e., Nuveen High and European Equity go up and down completely randomly.

Pair Corralation between Nuveen High and European Equity

If you would invest  939.00  in Nuveen High Income on August 30, 2024 and sell it today you would earn a total of  0.00  from holding Nuveen High Income or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	1.56%
Values	Daily Returns

Nuveen High Income  vs.  European Equity Closed

Nuveen High Income

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nuveen High Income has generated negative risk-adjusted returns adding no value to fund investors. Despite somewhat strong basic indicators, Nuveen High is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

European Equity Closed

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days European Equity Closed has generated negative risk-adjusted returns adding no value to fund investors. Despite latest weak performance, the Fund's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Nuveen High and European Equity

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

The idea behind Nuveen High Income and European Equity Closed 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.