Correlation Between Loews Corp and Nuveen New

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

By analyzing existing cross correlation between Loews Corp and Nuveen New York, you can compare the effects of market volatilities on Loews Corp and Nuveen New 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 Loews Corp with a short position of Nuveen New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Loews Corp and Nuveen New.

Diversification Opportunities for Loews Corp and Nuveen New

0.42

Correlation Coefficient

Loews Corp  Nuveen New

Very weak diversification

The 3 months correlation between Loews and Nuveen is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Loews Corp and Nuveen New York in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen New York and Loews Corp 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 Loews Corp are associated (or correlated) with Nuveen New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen New York has no effect on the direction of Loews Corp i.e., Loews Corp and Nuveen New go up and down completely randomly.

Pair Corralation between Loews Corp and Nuveen New

Taking into account the 90-day investment horizon Loews Corp is expected to generate 3.16 times more return on investment than Nuveen New. However, Loews Corp is 3.16 times more volatile than Nuveen New York. It trades about 0.08 of its potential returns per unit of risk. Nuveen New York is currently generating about 0.23 per unit of risk. If you would invest  8,462  in Loews Corp on December 27, 2024 and sell it today you would earn a total of  457.00  from holding Loews Corp or generate 5.4% return on investment over 90 days.

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

Loews Corp  vs.  Nuveen New York

Loews Corp

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Loews Corp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent essential indicators, Loews Corp is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

Nuveen New York

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Nuveen New York are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Nuveen New is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Loews Corp and Nuveen New

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

The idea behind Loews Corp and Nuveen New York 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.