Correlation Between IShares Cohen and Nuveen Short

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

By analyzing existing cross correlation between iShares Cohen Steers and Nuveen Short Term REIT, you can compare the effects of market volatilities on IShares Cohen and Nuveen 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 IShares Cohen with a short position of Nuveen Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Cohen and Nuveen Short.

Diversification Opportunities for IShares Cohen and Nuveen Short

0.57

Correlation Coefficient

IShares Cohen  Nuveen Short

Very weak diversification

The 3 months correlation between IShares and Nuveen is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding iShares Cohen Steers and Nuveen Short Term REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Short Term and IShares Cohen 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 iShares Cohen Steers are associated (or correlated) with Nuveen Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Short Term has no effect on the direction of IShares Cohen i.e., IShares Cohen and Nuveen Short go up and down completely randomly.

Pair Corralation between IShares Cohen and Nuveen Short

Considering the 90-day investment horizon iShares Cohen Steers is expected to generate 1.03 times more return on investment than Nuveen Short. However, IShares Cohen is 1.03 times more volatile than Nuveen Short Term REIT. It trades about 0.05 of its potential returns per unit of risk. Nuveen Short Term REIT is currently generating about -0.01 per unit of risk. If you would invest  5,943  in iShares Cohen Steers on December 28, 2024 and sell it today you would earn a total of  158.00  from holding iShares Cohen Steers or generate 2.66% return on investment over 90 days.

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

iShares Cohen Steers  vs.  Nuveen Short Term REIT

iShares Cohen Steers

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in iShares Cohen Steers are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable fundamental indicators, IShares Cohen is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Nuveen Short Term

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nuveen Short Term REIT has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Nuveen Short is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with IShares Cohen and Nuveen Short

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

The idea behind iShares Cohen Steers and Nuveen Short Term REIT 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.