Correlation Between Nuveen Global and Torrent Capital

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

Diversification Opportunities for Nuveen Global and Torrent Capital

0.44

Correlation Coefficient

Nuveen Global  Torrent Capital

Very weak diversification

The 3 months correlation between Nuveen and Torrent is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen Global High and Torrent Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Torrent Capital 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 Torrent Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Torrent Capital has no effect on the direction of Nuveen Global i.e., Nuveen Global and Torrent Capital go up and down completely randomly.

Pair Corralation between Nuveen Global and Torrent Capital

Considering the 90-day investment horizon Nuveen Global High is expected to generate 0.33 times more return on investment than Torrent Capital. However, Nuveen Global High is 3.04 times less risky than Torrent Capital. It trades about 0.13 of its potential returns per unit of risk. Torrent Capital is currently generating about -0.02 per unit of risk. If you would invest  1,249  in Nuveen Global High on December 29, 2024 and sell it today you would earn a total of  44.00  from holding Nuveen Global High or generate 3.52% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.31%
Values	Daily Returns

Nuveen Global High  vs.  Torrent Capital

Nuveen Global High

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Nuveen Global High are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong technical and fundamental indicators, Nuveen Global is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Torrent Capital

Risk-Adjusted Performance

Very Weak

Over the last 90 days Torrent Capital has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Torrent Capital is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Nuveen Global and Torrent Capital

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

The idea behind Nuveen Global High and Torrent Capital 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 CEOs Directory module to screen CEOs from public companies around the world.