Correlation Between Citigroup and Nuveen Nwq

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

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

Diversification Opportunities for Citigroup and Nuveen Nwq

0.94

Correlation Coefficient

Citigroup  Nuveen Nwq

Almost no diversification

The 3 months correlation between Citigroup and Nuveen is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Nuveen Nwq Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Nwq Large and Citigroup 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 Citigroup are associated (or correlated) with Nuveen Nwq. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Nwq Large has no effect on the direction of Citigroup i.e., Citigroup and Nuveen Nwq go up and down completely randomly.

Pair Corralation between Citigroup and Nuveen Nwq

Taking into account the 90-day investment horizon Citigroup is expected to generate 1.56 times more return on investment than Nuveen Nwq. However, Citigroup is 1.56 times more volatile than Nuveen Nwq Large Cap. It trades about 0.2 of its potential returns per unit of risk. Nuveen Nwq Large Cap is currently generating about 0.0 per unit of risk. If you would invest  6,876  in Citigroup on September 16, 2024 and sell it today you would earn a total of  225.00  from holding Citigroup or generate 3.27% return on investment over 90 days.

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

Citigroup  vs.  Nuveen Nwq Large Cap

Citigroup

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Citigroup are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating fundamental indicators, Citigroup exhibited solid returns over the last few months and may actually be approaching a breakup point.

Nuveen Nwq Large

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Nuveen Nwq Large Cap are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Nuveen Nwq is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Citigroup and Nuveen Nwq

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

The idea behind Citigroup and Nuveen Nwq Large Cap 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.