Correlation Between Nuveen High and Aberdeen Japan

Can any of the company-specific risk be diversified away by investing in both Nuveen High and Aberdeen Japan 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 Aberdeen Japan 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 Aberdeen Japan Equity, you can compare the effects of market volatilities on Nuveen High and Aberdeen Japan 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 Aberdeen Japan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuveen High and Aberdeen Japan.

Diversification Opportunities for Nuveen High and Aberdeen Japan

-0.76

Correlation Coefficient

Nuveen High  Aberdeen Japan

Pay attention - limited upside

The 3 months correlation between Nuveen and Aberdeen is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen High Income and Aberdeen Japan Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aberdeen Japan Equity 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 Aberdeen Japan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aberdeen Japan Equity has no effect on the direction of Nuveen High i.e., Nuveen High and Aberdeen Japan go up and down completely randomly.

Pair Corralation between Nuveen High and Aberdeen Japan

If you would invest  589.00  in Aberdeen Japan Equity on September 4, 2024 and sell it today you would earn a total of  3.00  from holding Aberdeen Japan Equity or generate 0.51% return on investment over 90 days.

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

Nuveen High Income  vs.  Aberdeen Japan Equity

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.

Aberdeen Japan Equity

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Aberdeen Japan Equity are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. Even with relatively invariable technical and fundamental indicators, Aberdeen Japan is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Nuveen High and Aberdeen Japan

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

The idea behind Nuveen High Income and Aberdeen Japan Equity 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.