Correlation Between Nuveen Mid and Clarkston Founders

Can any of the company-specific risk be diversified away by investing in both Nuveen Mid and Clarkston Founders 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 Clarkston Founders 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 Clarkston Founders Fund, you can compare the effects of market volatilities on Nuveen Mid and Clarkston Founders 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 Clarkston Founders. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuveen Mid and Clarkston Founders.

Diversification Opportunities for Nuveen Mid and Clarkston Founders

0.7

Correlation Coefficient

Nuveen Mid  Clarkston Founders

Poor diversification

The 3 months correlation between Nuveen and Clarkston is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen Mid Cap and Clarkston Founders Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clarkston Founders 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 Clarkston Founders. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clarkston Founders has no effect on the direction of Nuveen Mid i.e., Nuveen Mid and Clarkston Founders go up and down completely randomly.

Pair Corralation between Nuveen Mid and Clarkston Founders

Assuming the 90 days horizon Nuveen Mid Cap is expected to under-perform the Clarkston Founders. In addition to that, Nuveen Mid is 1.24 times more volatile than Clarkston Founders Fund. It trades about -0.06 of its total potential returns per unit of risk. Clarkston Founders Fund is currently generating about -0.02 per unit of volatility. If you would invest  1,591  in Clarkston Founders Fund on December 30, 2024 and sell it today you would lose (17.00) from holding Clarkston Founders Fund or give up 1.07% of portfolio value over 90 days.

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

Nuveen Mid Cap  vs.  Clarkston Founders Fund

Nuveen Mid Cap

Risk-Adjusted Performance

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 fairly strong forward indicators, Nuveen Mid is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Clarkston Founders

Risk-Adjusted Performance

Very Weak

Over the last 90 days Clarkston Founders Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental indicators, Clarkston Founders 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 Clarkston Founders

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

The idea behind Nuveen Mid Cap and Clarkston Founders Fund 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..