Correlation Between Nuveen Mid and Columbia Select

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

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

Diversification Opportunities for Nuveen Mid and Columbia Select

0.91

Correlation Coefficient

Nuveen Mid  Columbia Select

Almost no diversification

The 3 months correlation between Nuveen and Columbia is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen Mid Cap and Columbia Select Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Select Large and Nuveen Mid 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 Mid Cap are associated (or correlated) with Columbia Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Select Large has no effect on the direction of Nuveen Mid i.e., Nuveen Mid and Columbia Select go up and down completely randomly.

Pair Corralation between Nuveen Mid and Columbia Select

Assuming the 90 days horizon Nuveen Mid Cap is expected to generate 1.23 times more return on investment than Columbia Select. However, Nuveen Mid is 1.23 times more volatile than Columbia Select Large Cap. It trades about 0.03 of its potential returns per unit of risk. Columbia Select Large Cap is currently generating about 0.04 per unit of risk. If you would invest  4,480  in Nuveen Mid Cap on October 11, 2024 and sell it today you would earn a total of  568.00  from holding Nuveen Mid Cap or generate 12.68% return on investment over 90 days.

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

Nuveen Mid Cap  vs.  Columbia Select Large Cap

Nuveen Mid Cap

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nuveen Mid Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Columbia Select Large

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Nuveen Mid and Columbia Select

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

The idea behind Nuveen Mid Cap and Columbia Select 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.