Correlation Between Mastercard and Nuveen Multi

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

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

Diversification Opportunities for Mastercard and Nuveen Multi

-0.64

Correlation Coefficient

Mastercard  Nuveen Multi

Excellent diversification

The 3 months correlation between Mastercard and Nuveen is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Mastercard and Nuveen Multi Asset Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Multi Asset and Mastercard 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 Mastercard are associated (or correlated) with Nuveen Multi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Multi Asset has no effect on the direction of Mastercard i.e., Mastercard and Nuveen Multi go up and down completely randomly.

Pair Corralation between Mastercard and Nuveen Multi

Allowing for the 90-day total investment horizon Mastercard is expected to generate 1.75 times more return on investment than Nuveen Multi. However, Mastercard is 1.75 times more volatile than Nuveen Multi Asset Income. It trades about 0.17 of its potential returns per unit of risk. Nuveen Multi Asset Income is currently generating about -0.02 per unit of risk. If you would invest  47,673  in Mastercard on September 5, 2024 and sell it today you would earn a total of  4,945  from holding Mastercard or generate 10.37% return on investment over 90 days.

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

Mastercard  vs.  Nuveen Multi Asset Income

Mastercard

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Mastercard are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Mastercard may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Nuveen Multi Asset

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nuveen Multi Asset Income has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Nuveen Multi is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Mastercard and Nuveen Multi

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

The idea behind Mastercard and Nuveen Multi Asset Income 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.