Correlation Between Nuveen New and Insight Select

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

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

Diversification Opportunities for Nuveen New and Insight Select

-0.07

Correlation Coefficient

Nuveen New  Insight Select

Good diversification

The 3 months correlation between Nuveen and Insight is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen New York and Insight Select Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Insight Select Income and Nuveen New 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 New York are associated (or correlated) with Insight Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Insight Select Income has no effect on the direction of Nuveen New i.e., Nuveen New and Insight Select go up and down completely randomly.

Pair Corralation between Nuveen New and Insight Select

Considering the 90-day investment horizon Nuveen New York is expected to under-perform the Insight Select. But the fund apears to be less risky and, when comparing its historical volatility, Nuveen New York is 2.74 times less risky than Insight Select. The fund trades about -0.09 of its potential returns per unit of risk. The Insight Select Income is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  1,706  in Insight Select Income on September 13, 2024 and sell it today you would earn a total of  54.00  from holding Insight Select Income or generate 3.17% return on investment over 90 days.

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

Nuveen New York  vs.  Insight Select Income

Nuveen New York

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nuveen New York has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Nuveen New is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Insight Select Income

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Insight Select Income are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong basic indicators, Insight Select is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Nuveen New and Insight Select

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

The idea behind Nuveen New York and Insight Select 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.