Correlation Between Nuveen Global and Aqr Large

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

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

Diversification Opportunities for Nuveen Global and Aqr Large

0.34

Correlation Coefficient

Nuveen Global  Aqr Large

Weak diversification

The 3 months correlation between Nuveen and Aqr is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen Global Infrastructure and Aqr Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aqr Large Cap and Nuveen Global 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 Global Infrastructure are associated (or correlated) with Aqr Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aqr Large Cap has no effect on the direction of Nuveen Global i.e., Nuveen Global and Aqr Large go up and down completely randomly.

Pair Corralation between Nuveen Global and Aqr Large

Assuming the 90 days horizon Nuveen Global Infrastructure is expected to generate 0.57 times more return on investment than Aqr Large. However, Nuveen Global Infrastructure is 1.75 times less risky than Aqr Large. It trades about 0.14 of its potential returns per unit of risk. Aqr Large Cap is currently generating about -0.08 per unit of risk. If you would invest  1,122  in Nuveen Global Infrastructure on December 20, 2024 and sell it today you would earn a total of  71.00  from holding Nuveen Global Infrastructure or generate 6.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.33%
Values	Daily Returns

Nuveen Global Infrastructure  vs.  Aqr Large Cap

Nuveen Global Infras

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Nuveen Global Infrastructure are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Nuveen Global may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Aqr Large Cap

Risk-Adjusted Performance

Very Weak

Over the last 90 days Aqr Large 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.

Pair Trading with Nuveen Global and Aqr Large

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

The idea behind Nuveen Global Infrastructure and Aqr 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.