Correlation Between Nuveen Mid and Grizzly Short

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

Diversification Opportunities for Nuveen Mid and Grizzly Short

-0.83

Correlation Coefficient

Nuveen Mid  Grizzly Short

Pay attention - limited upside

The 3 months correlation between Nuveen and Grizzly is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen Mid Cap and Grizzly Short Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grizzly Short 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 Grizzly Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grizzly Short has no effect on the direction of Nuveen Mid i.e., Nuveen Mid and Grizzly Short go up and down completely randomly.

Pair Corralation between Nuveen Mid and Grizzly Short

Assuming the 90 days horizon Nuveen Mid Cap is expected to under-perform the Grizzly Short. In addition to that, Nuveen Mid is 1.3 times more volatile than Grizzly Short Fund. It trades about -0.17 of its total potential returns per unit of risk. Grizzly Short Fund is currently generating about 0.1 per unit of volatility. If you would invest  528.00  in Grizzly Short Fund on November 29, 2024 and sell it today you would earn a total of  24.00  from holding Grizzly Short Fund or generate 4.55% return on investment over 90 days.

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

Nuveen Mid Cap  vs.  Grizzly Short 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 latest weak performance, the Fund's forward indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Grizzly Short

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Grizzly Short Fund are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Grizzly Short 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 Grizzly Short

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

The idea behind Nuveen Mid Cap and Grizzly Short 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.

Check out your portfolio center.

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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.