Correlation Between Nuveen Global and CBH

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

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

Diversification Opportunities for Nuveen Global and CBH

0.35

Correlation Coefficient

Nuveen Global  CBH

Weak diversification

The 3 months correlation between Nuveen and CBH is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen Global High and CBH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CBH and Nuveen Global 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 Global High are associated (or correlated) with CBH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CBH has no effect on the direction of Nuveen Global i.e., Nuveen Global and CBH go up and down completely randomly.

Pair Corralation between Nuveen Global and CBH

Considering the 90-day investment horizon Nuveen Global High is expected to generate 1.42 times more return on investment than CBH. However, Nuveen Global is 1.42 times more volatile than CBH. It trades about 0.08 of its potential returns per unit of risk. CBH is currently generating about 0.06 per unit of risk. If you would invest  937.00  in Nuveen Global High on September 26, 2024 and sell it today you would earn a total of  335.00  from holding Nuveen Global High or generate 35.75% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	84.07%
Values	Daily Returns

Nuveen Global High  vs.  CBH

Nuveen Global High

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nuveen Global High has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong technical and fundamental indicators, Nuveen Global is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

CBH

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CBH has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong fundamental drivers, CBH is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Nuveen Global and CBH

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

The idea behind Nuveen Global High and CBH 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..