Correlation Between Nuveen Nwq and Dodge Cox

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

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

Diversification Opportunities for Nuveen Nwq and Dodge Cox

0.98

Correlation Coefficient

Nuveen Nwq  Dodge Cox

Almost no diversification

The 3 months correlation between Nuveen and Dodge is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen Nwq Large Cap and Dodge Cox Stock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dodge Cox Stock and Nuveen Nwq 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 Nwq Large Cap are associated (or correlated) with Dodge Cox. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dodge Cox Stock has no effect on the direction of Nuveen Nwq i.e., Nuveen Nwq and Dodge Cox go up and down completely randomly.

Pair Corralation between Nuveen Nwq and Dodge Cox

Assuming the 90 days horizon Nuveen Nwq Large Cap is expected to generate 1.01 times more return on investment than Dodge Cox. However, Nuveen Nwq is 1.01 times more volatile than Dodge Cox Stock. It trades about 0.28 of its potential returns per unit of risk. Dodge Cox Stock is currently generating about 0.2 per unit of risk. If you would invest  384.00  in Nuveen Nwq Large Cap on August 31, 2024 and sell it today you would earn a total of  22.00  from holding Nuveen Nwq Large Cap or generate 5.73% return on investment over 90 days.

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

Nuveen Nwq Large Cap  vs.  Dodge Cox Stock

Nuveen Nwq Large

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Nuveen Nwq Large Cap are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Nuveen Nwq may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Dodge Cox Stock

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Dodge Cox Stock are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Dodge Cox may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with Nuveen Nwq and Dodge Cox

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

The idea behind Nuveen Nwq Large Cap and Dodge Cox Stock 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.