Correlation Between Multi-asset Real and Nuveen California

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

By analyzing existing cross correlation between Multi Asset Real Return and Nuveen California High, you can compare the effects of market volatilities on Multi-asset Real and Nuveen California 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 Multi-asset Real with a short position of Nuveen California. Check out your portfolio center. Please also check ongoing floating volatility patterns of Multi-asset Real and Nuveen California.

Diversification Opportunities for Multi-asset Real and Nuveen California

-0.35

Correlation Coefficient

Multi-asset Real  Nuveen California

Very good diversification

The 3 months correlation between Multi-asset and Nuveen is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Multi Asset Real Return and Nuveen California High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen California High and Multi-asset Real 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 Multi Asset Real Return are associated (or correlated) with Nuveen California. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen California High has no effect on the direction of Multi-asset Real i.e., Multi-asset Real and Nuveen California go up and down completely randomly.

Pair Corralation between Multi-asset Real and Nuveen California

Assuming the 90 days horizon Multi Asset Real Return is expected to under-perform the Nuveen California. In addition to that, Multi-asset Real is 5.69 times more volatile than Nuveen California High. It trades about -0.14 of its total potential returns per unit of risk. Nuveen California High is currently generating about 0.05 per unit of volatility. If you would invest  785.00  in Nuveen California High on December 24, 2024 and sell it today you would earn a total of  7.00  from holding Nuveen California High or generate 0.89% return on investment over 90 days.

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

Multi Asset Real Return  vs.  Nuveen California High

Multi Asset Real

Risk-Adjusted Performance

Very Weak

Over the last 90 days Multi Asset Real Return has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Nuveen California High

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Nuveen California High are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Nuveen California is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Multi-asset Real and Nuveen California

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

The idea behind Multi Asset Real Return and Nuveen California High 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.