Correlation Between Nuveen Multi and Clearbridge Energy

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

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

Diversification Opportunities for Nuveen Multi and Clearbridge Energy

-0.23

Correlation Coefficient

Nuveen Multi  Clearbridge Energy

Very good diversification

The 3 months correlation between Nuveen and Clearbridge is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen Multi Mrkt and Clearbridge Energy Mlp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clearbridge Energy Mlp and Nuveen Multi 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 Multi Mrkt are associated (or correlated) with Clearbridge Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clearbridge Energy Mlp has no effect on the direction of Nuveen Multi i.e., Nuveen Multi and Clearbridge Energy go up and down completely randomly.

Pair Corralation between Nuveen Multi and Clearbridge Energy

Considering the 90-day investment horizon Nuveen Multi Mrkt is expected to under-perform the Clearbridge Energy. But the fund apears to be less risky and, when comparing its historical volatility, Nuveen Multi Mrkt is 589.22 times less risky than Clearbridge Energy. The fund trades about -0.04 of its potential returns per unit of risk. The Clearbridge Energy Mlp is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest  17.00  in Clearbridge Energy Mlp on August 31, 2024 and sell it today you would earn a total of  3.00  from holding Clearbridge Energy Mlp or generate 17.65% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	11.11%
Values	Daily Returns

Nuveen Multi Mrkt  vs.  Clearbridge Energy Mlp

Nuveen Multi Mrkt

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nuveen Multi Mrkt has generated negative risk-adjusted returns adding no value to fund investors. In spite of very healthy primary indicators, Nuveen Multi is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Clearbridge Energy Mlp

Risk-Adjusted Performance

0 of 100

Strong

Over the last 90 days Clearbridge Energy Mlp has generated negative risk-adjusted returns adding no value to fund investors. Even with relatively weak basic indicators, Clearbridge Energy reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Nuveen Multi and Clearbridge Energy

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

The idea behind Nuveen Multi Mrkt and Clearbridge Energy Mlp 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.