Correlation Between Intrepid Income and Nuveen Dividend

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

By analyzing existing cross correlation between Intrepid Income Fund and Nuveen Dividend Value, you can compare the effects of market volatilities on Intrepid Income and Nuveen Dividend 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 Intrepid Income with a short position of Nuveen Dividend. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intrepid Income and Nuveen Dividend.

Diversification Opportunities for Intrepid Income and Nuveen Dividend

0.79

Correlation Coefficient

Intrepid Income  Nuveen Dividend

Poor diversification

The 3 months correlation between Intrepid and Nuveen is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Intrepid Income Fund and Nuveen Dividend Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Dividend Value and Intrepid Income 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 Intrepid Income Fund are associated (or correlated) with Nuveen Dividend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Dividend Value has no effect on the direction of Intrepid Income i.e., Intrepid Income and Nuveen Dividend go up and down completely randomly.

Pair Corralation between Intrepid Income and Nuveen Dividend

Assuming the 90 days horizon Intrepid Income is expected to generate 1.18 times less return on investment than Nuveen Dividend. But when comparing it to its historical volatility, Intrepid Income Fund is 5.07 times less risky than Nuveen Dividend. It trades about 0.23 of its potential returns per unit of risk. Nuveen Dividend Value is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  1,602  in Nuveen Dividend Value on September 15, 2024 and sell it today you would earn a total of  32.00  from holding Nuveen Dividend Value or generate 2.0% return on investment over 90 days.

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

Intrepid Income Fund  vs.  Nuveen Dividend Value

Intrepid Income

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Intrepid Income Fund are ranked lower than 18 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Intrepid Income is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Nuveen Dividend Value

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Nuveen Dividend Value are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Nuveen Dividend is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Intrepid Income and Nuveen Dividend

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

The idea behind Intrepid Income Fund and Nuveen Dividend Value 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..