Correlation Between Lumia and Nuveen Nwq

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

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

Diversification Opportunities for Lumia and Nuveen Nwq

-0.58

Correlation Coefficient

Lumia  Nuveen Nwq

Excellent diversification

The 3 months correlation between Lumia and Nuveen is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Lumia and Nuveen Nwq Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Nwq Small and Lumia 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 Lumia are associated (or correlated) with Nuveen Nwq. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Nwq Small has no effect on the direction of Lumia i.e., Lumia and Nuveen Nwq go up and down completely randomly.

Pair Corralation between Lumia and Nuveen Nwq

Assuming the 90 days trading horizon Lumia is expected to under-perform the Nuveen Nwq. In addition to that, Lumia is 5.52 times more volatile than Nuveen Nwq Small Cap. It trades about -0.32 of its total potential returns per unit of risk. Nuveen Nwq Small Cap is currently generating about 0.07 per unit of volatility. If you would invest  5,268  in Nuveen Nwq Small Cap on October 25, 2024 and sell it today you would earn a total of  71.00  from holding Nuveen Nwq Small Cap or generate 1.35% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	85.71%
Values	Daily Returns

Lumia  vs.  Nuveen Nwq Small Cap

Lumia

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Lumia are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Lumia exhibited solid returns over the last few months and may actually be approaching a breakup point.

Nuveen Nwq Small

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nuveen Nwq Small Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's technical and fundamental indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Lumia and Nuveen Nwq

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

The idea behind Lumia and Nuveen Nwq Small Cap 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.