Correlation Between Westwood Holdings and Nuveen Arizona

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

By analyzing existing cross correlation between Westwood Holdings Group and Nuveen Arizona Quality, you can compare the effects of market volatilities on Westwood Holdings and Nuveen Arizona 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 Westwood Holdings with a short position of Nuveen Arizona. Check out your portfolio center. Please also check ongoing floating volatility patterns of Westwood Holdings and Nuveen Arizona.

Diversification Opportunities for Westwood Holdings and Nuveen Arizona

0.0

Correlation Coefficient

Westwood Holdings  Nuveen Arizona

Pay attention - limited upside

The 3 months correlation between Westwood and Nuveen is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Westwood Holdings Group and Nuveen Arizona Quality in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Arizona Quality and Westwood Holdings 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 Westwood Holdings Group are associated (or correlated) with Nuveen Arizona. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Arizona Quality has no effect on the direction of Westwood Holdings i.e., Westwood Holdings and Nuveen Arizona go up and down completely randomly.

Pair Corralation between Westwood Holdings and Nuveen Arizona

If you would invest  1,288  in Westwood Holdings Group on September 5, 2024 and sell it today you would earn a total of  283.00  from holding Westwood Holdings Group or generate 21.97% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Westwood Holdings Group  vs.  Nuveen Arizona Quality

Westwood Holdings

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Westwood Holdings Group are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly abnormal technical indicators, Westwood Holdings reported solid returns over the last few months and may actually be approaching a breakup point.

Nuveen Arizona Quality

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Westwood Holdings and Nuveen Arizona

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

The idea behind Westwood Holdings Group and Nuveen Arizona Quality 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.