Correlation Between Nuveen Mortgage and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Nuveen Mortgage and Dow Jones 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 Mortgage and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nuveen Mortgage Opportunity and Dow Jones Industrial, you can compare the effects of market volatilities on Nuveen Mortgage and Dow Jones 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 Mortgage with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuveen Mortgage and Dow Jones.
Diversification Opportunities for Nuveen Mortgage and Dow Jones
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Nuveen and Dow is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen Mortgage Opportunity and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial and Nuveen Mortgage 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 Mortgage Opportunity are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Nuveen Mortgage i.e., Nuveen Mortgage and Dow Jones go up and down completely randomly.
Pair Corralation between Nuveen Mortgage and Dow Jones
Considering the 90-day investment horizon Nuveen Mortgage Opportunity is expected to generate 0.69 times more return on investment than Dow Jones. However, Nuveen Mortgage Opportunity is 1.44 times less risky than Dow Jones. It trades about 0.33 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.12 per unit of risk. If you would invest 1,784 in Nuveen Mortgage Opportunity on December 2, 2024 and sell it today you would earn a total of 121.00 from holding Nuveen Mortgage Opportunity or generate 6.78% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Nuveen Mortgage Opportunity vs. Dow Jones Industrial
Performance |
Timeline |
Nuveen Mortgage and Dow Jones Volatility Contrast
Predicted Return Density |
Returns |
Nuveen Mortgage Opportunity
Pair trading matchups for Nuveen Mortgage
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Nuveen Mortgage and Dow Jones
The main advantage of trading using opposite Nuveen Mortgage and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuveen Mortgage position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.Nuveen Mortgage vs. Western Asset High | Nuveen Mortgage vs. Pioneer Municipal High | Nuveen Mortgage vs. The Gabelli Equity | Nuveen Mortgage vs. Eaton Vance National |
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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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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