Correlation Between Nuveen Dividend and Nuveen Mid

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

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

Diversification Opportunities for Nuveen Dividend and Nuveen Mid

0.97

Correlation Coefficient

Nuveen Dividend  Nuveen Mid

Almost no diversification

The 3 months correlation between Nuveen and Nuveen is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen Dividend Value and Nuveen Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Mid Cap and Nuveen Dividend 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 Dividend Value are associated (or correlated) with Nuveen Mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Mid Cap has no effect on the direction of Nuveen Dividend i.e., Nuveen Dividend and Nuveen Mid go up and down completely randomly.

Pair Corralation between Nuveen Dividend and Nuveen Mid

Assuming the 90 days horizon Nuveen Dividend Value is expected to under-perform the Nuveen Mid. But the mutual fund apears to be less risky and, when comparing its historical volatility, Nuveen Dividend Value is 1.45 times less risky than Nuveen Mid. The mutual fund trades about -0.2 of its potential returns per unit of risk. The Nuveen Mid Cap is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  5,969  in Nuveen Mid Cap on September 17, 2024 and sell it today you would lose (15.00) from holding Nuveen Mid Cap or give up 0.25% of portfolio value over 90 days.

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

Nuveen Dividend Value  vs.  Nuveen Mid Cap

Nuveen Dividend Value

Risk-Adjusted Performance

3 of 100

Insignificant

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

Nuveen Mid Cap

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Nuveen Mid Cap are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Nuveen Mid 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 Dividend and Nuveen Mid

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

The idea behind Nuveen Dividend Value and Nuveen Mid 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.