Correlation Between Nuveen Real and Mainstay Nerstone

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

By analyzing existing cross correlation between Nuveen Real Estate and Mainstay Nerstone Growth, you can compare the effects of market volatilities on Nuveen Real and Mainstay Nerstone 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 Real with a short position of Mainstay Nerstone. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuveen Real and Mainstay Nerstone.

Diversification Opportunities for Nuveen Real and Mainstay Nerstone

0.25

Correlation Coefficient

Nuveen Real  Mainstay Nerstone

Modest diversification

The 3 months correlation between Nuveen and Mainstay is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen Real Estate and Mainstay Nerstone Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mainstay Nerstone Growth and Nuveen 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 Nuveen Real Estate are associated (or correlated) with Mainstay Nerstone. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mainstay Nerstone Growth has no effect on the direction of Nuveen Real i.e., Nuveen Real and Mainstay Nerstone go up and down completely randomly.

Pair Corralation between Nuveen Real and Mainstay Nerstone

Assuming the 90 days horizon Nuveen Real Estate is expected to under-perform the Mainstay Nerstone. But the mutual fund apears to be less risky and, when comparing its historical volatility, Nuveen Real Estate is 1.24 times less risky than Mainstay Nerstone. The mutual fund trades about -0.08 of its potential returns per unit of risk. The Mainstay Nerstone Growth is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  5,244  in Mainstay Nerstone Growth on October 7, 2024 and sell it today you would lose (45.00) from holding Mainstay Nerstone Growth or give up 0.86% of portfolio value over 90 days.

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

Nuveen Real Estate  vs.  Mainstay Nerstone Growth

Nuveen Real Estate

Risk-Adjusted Performance

0 of 100

Very Weak

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

Mainstay Nerstone Growth

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Mainstay Nerstone Growth are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Mainstay Nerstone 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 Real and Mainstay Nerstone

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

The idea behind Nuveen Real Estate and Mainstay Nerstone Growth 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.