Correlation Between Renaissance IPO and Nuveen ESG

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

By analyzing existing cross correlation between Renaissance IPO ETF and Nuveen ESG Mid Cap, you can compare the effects of market volatilities on Renaissance IPO and Nuveen ESG 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 Renaissance IPO with a short position of Nuveen ESG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Renaissance IPO and Nuveen ESG.

Diversification Opportunities for Renaissance IPO and Nuveen ESG

0.86

Correlation Coefficient

Renaissance IPO  Nuveen ESG

Very poor diversification

The 3 months correlation between Renaissance and Nuveen is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Renaissance IPO ETF and Nuveen ESG Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen ESG Mid and Renaissance IPO 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 Renaissance IPO ETF are associated (or correlated) with Nuveen ESG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen ESG Mid has no effect on the direction of Renaissance IPO i.e., Renaissance IPO and Nuveen ESG go up and down completely randomly.

Pair Corralation between Renaissance IPO and Nuveen ESG

Considering the 90-day investment horizon Renaissance IPO ETF is expected to under-perform the Nuveen ESG. In addition to that, Renaissance IPO is 1.16 times more volatile than Nuveen ESG Mid Cap. It trades about -0.06 of its total potential returns per unit of risk. Nuveen ESG Mid Cap is currently generating about -0.04 per unit of volatility. If you would invest  4,937  in Nuveen ESG Mid Cap on September 22, 2024 and sell it today you would lose (64.00) from holding Nuveen ESG Mid Cap or give up 1.3% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	95.45%
Values	Daily Returns

Renaissance IPO ETF  vs.  Nuveen ESG Mid Cap

Renaissance IPO ETF

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Renaissance IPO ETF are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Renaissance IPO is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Nuveen ESG Mid

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Nuveen ESG Mid Cap are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating primary indicators, Nuveen ESG may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Renaissance IPO and Nuveen ESG

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

The idea behind Renaissance IPO ETF and Nuveen ESG Mid Cap 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.