Correlation Between Nuveen Credit and Cornerstone Strategic

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

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

Diversification Opportunities for Nuveen Credit and Cornerstone Strategic

0.28

Correlation Coefficient

Nuveen Credit  Cornerstone Strategic

Modest diversification

The 3 months correlation between Nuveen and Cornerstone is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen Credit Strategies and Cornerstone Strategic Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cornerstone Strategic and Nuveen Credit 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 Credit Strategies are associated (or correlated) with Cornerstone Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cornerstone Strategic has no effect on the direction of Nuveen Credit i.e., Nuveen Credit and Cornerstone Strategic go up and down completely randomly.

Pair Corralation between Nuveen Credit and Cornerstone Strategic

Considering the 90-day investment horizon Nuveen Credit Strategies is expected to generate 0.44 times more return on investment than Cornerstone Strategic. However, Nuveen Credit Strategies is 2.28 times less risky than Cornerstone Strategic. It trades about -0.1 of its potential returns per unit of risk. Cornerstone Strategic Value is currently generating about -0.08 per unit of risk. If you would invest  558.00  in Nuveen Credit Strategies on December 27, 2024 and sell it today you would lose (21.00) from holding Nuveen Credit Strategies or give up 3.76% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Nuveen Credit Strategies  vs.  Cornerstone Strategic Value

Nuveen Credit Strategies

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nuveen Credit Strategies has generated negative risk-adjusted returns adding no value to fund investors. In spite of rather sound basic indicators, Nuveen Credit is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Cornerstone Strategic

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cornerstone Strategic Value has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's essential indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the fund investors.

Pair Trading with Nuveen Credit and Cornerstone Strategic

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

The idea behind Nuveen Credit Strategies and Cornerstone Strategic Value 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.