Correlation Between Nuveen Global and Urbana

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

Diversification Opportunities for Nuveen Global and Urbana

0.61

Correlation Coefficient

Nuveen Global  Urbana

Poor diversification

The 3 months correlation between Nuveen and Urbana is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen Global High and Urbana in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Urbana 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 Urbana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Urbana has no effect on the direction of Nuveen Global i.e., Nuveen Global and Urbana go up and down completely randomly.

Pair Corralation between Nuveen Global and Urbana

Considering the 90-day investment horizon Nuveen Global is expected to generate 1.02 times less return on investment than Urbana. But when comparing it to its historical volatility, Nuveen Global High is 1.93 times less risky than Urbana. It trades about 0.1 of its potential returns per unit of risk. Urbana is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  305.00  in Urbana on September 16, 2024 and sell it today you would earn a total of  117.00  from holding Urbana or generate 38.36% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	96.57%
Values	Daily Returns

Nuveen Global High  vs.  Urbana

Nuveen Global High

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Nuveen Global High are ranked lower than 9 (%) 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.

Urbana

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Urbana are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly inconsistent basic indicators, Urbana may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Nuveen Global and Urbana

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

The idea behind Nuveen Global High and Urbana 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.

Check out your portfolio center.

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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.