Correlation Between Nuveen ESG and Barclays Capital

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

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

Diversification Opportunities for Nuveen ESG and Barclays Capital

-0.65

Correlation Coefficient

Nuveen ESG  Barclays Capital

Excellent diversification

The 3 months correlation between Nuveen and Barclays is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen ESG Mid Cap and Barclays Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barclays Capital and Nuveen ESG 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 ESG Mid Cap are associated (or correlated) with Barclays Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barclays Capital has no effect on the direction of Nuveen ESG i.e., Nuveen ESG and Barclays Capital go up and down completely randomly.

Pair Corralation between Nuveen ESG and Barclays Capital

If you would invest  4,440  in Nuveen ESG Mid Cap on September 22, 2024 and sell it today you would earn a total of  433.00  from holding Nuveen ESG Mid Cap or generate 9.75% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	1.54%
Values	Daily Returns

Nuveen ESG Mid Cap  vs.  Barclays Capital

Nuveen ESG Mid

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Nuveen ESG Mid Cap are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating primary indicators, Nuveen ESG may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Barclays Capital

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Barclays Capital has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, Barclays Capital 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 ESG and Barclays Capital

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

The idea behind Nuveen ESG Mid Cap and Barclays Capital 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.