Correlation Between Nuveen Dividend and Cohen Steers

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

By analyzing existing cross correlation between Nuveen Dividend Advantage and Cohen Steers Reit, you can compare the effects of market volatilities on Nuveen Dividend and Cohen Steers 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 Dividend with a short position of Cohen Steers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuveen Dividend and Cohen Steers.

Diversification Opportunities for Nuveen Dividend and Cohen Steers

0.65

Correlation Coefficient

Nuveen Dividend  Cohen Steers

Poor diversification

The 3 months correlation between Nuveen and Cohen is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen Dividend Advantage and Cohen Steers Reit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cohen Steers Reit and Nuveen Dividend 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 Dividend Advantage are associated (or correlated) with Cohen Steers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cohen Steers Reit has no effect on the direction of Nuveen Dividend i.e., Nuveen Dividend and Cohen Steers go up and down completely randomly.

Pair Corralation between Nuveen Dividend and Cohen Steers

Considering the 90-day investment horizon Nuveen Dividend Advantage is expected to generate 0.54 times more return on investment than Cohen Steers. However, Nuveen Dividend Advantage is 1.84 times less risky than Cohen Steers. It trades about 0.3 of its potential returns per unit of risk. Cohen Steers Reit is currently generating about 0.05 per unit of risk. If you would invest  1,132  in Nuveen Dividend Advantage on October 23, 2024 and sell it today you would earn a total of  35.00  from holding Nuveen Dividend Advantage or generate 3.09% return on investment over 90 days.

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

Nuveen Dividend Advantage  vs.  Cohen Steers Reit

Nuveen Dividend Advantage

Risk-Adjusted Performance

0 of 100

Very Weak

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

Cohen Steers Reit

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cohen Steers Reit has generated negative risk-adjusted returns adding no value to fund investors. Even with latest fragile performance, the Fund's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the fund retail investors.

Pair Trading with Nuveen Dividend and Cohen Steers

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

The idea behind Nuveen Dividend Advantage and Cohen Steers Reit 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.