Correlation Between Wilmington Funds and Nuveen Limited

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

By analyzing existing cross correlation between Wilmington Funds and Nuveen Limited Term, you can compare the effects of market volatilities on Wilmington Funds and Nuveen Limited 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 Wilmington Funds with a short position of Nuveen Limited. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wilmington Funds and Nuveen Limited.

Diversification Opportunities for Wilmington Funds and Nuveen Limited

-0.23

Correlation Coefficient

Wilmington Funds  Nuveen Limited

Very good diversification

The 3 months correlation between Wilmington and Nuveen is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Wilmington Funds and Nuveen Limited Term in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Limited Term and Wilmington Funds 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 Wilmington Funds are associated (or correlated) with Nuveen Limited. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Limited Term has no effect on the direction of Wilmington Funds i.e., Wilmington Funds and Nuveen Limited go up and down completely randomly.

Pair Corralation between Wilmington Funds and Nuveen Limited

If you would invest  100.00  in Wilmington Funds on September 4, 2024 and sell it today you would earn a total of  0.00  from holding Wilmington Funds or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Wilmington Funds   vs.  Nuveen Limited Term

Wilmington Funds

Risk-Adjusted Performance

0 of 100

Very Weak

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

Nuveen Limited Term

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Wilmington Funds and Nuveen Limited

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

The idea behind Wilmington Funds and Nuveen Limited Term 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.