Correlation Between Nuveen Real and Voya Emerging

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

By analyzing existing cross correlation between Nuveen Real Asset and Voya Emerging Markets, you can compare the effects of market volatilities on Nuveen Real and Voya Emerging 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 Voya Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuveen Real and Voya Emerging.

Diversification Opportunities for Nuveen Real and Voya Emerging

0.03

Correlation Coefficient

Nuveen Real  Voya Emerging

Significant diversification

The 3 months correlation between Nuveen and Voya is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen Real Asset and Voya Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Emerging Markets 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 Asset are associated (or correlated) with Voya Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Emerging Markets has no effect on the direction of Nuveen Real i.e., Nuveen Real and Voya Emerging go up and down completely randomly.

Pair Corralation between Nuveen Real and Voya Emerging

Considering the 90-day investment horizon Nuveen Real Asset is expected to generate 1.03 times more return on investment than Voya Emerging. However, Nuveen Real is 1.03 times more volatile than Voya Emerging Markets. It trades about 0.07 of its potential returns per unit of risk. Voya Emerging Markets is currently generating about 0.05 per unit of risk. If you would invest  984.00  in Nuveen Real Asset on September 3, 2024 and sell it today you would earn a total of  366.00  from holding Nuveen Real Asset or generate 37.2% return on investment over 90 days.

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

Nuveen Real Asset  vs.  Voya Emerging Markets

Nuveen Real Asset

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Nuveen Real Asset are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. Despite fairly fragile basic indicators, Nuveen Real may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Voya Emerging Markets

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Voya Emerging Markets has generated negative risk-adjusted returns adding no value to fund investors. In spite of rather sound technical indicators, Voya Emerging is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Nuveen Real and Voya Emerging

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

The idea behind Nuveen Real Asset and Voya Emerging Markets 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.