Correlation Between Nuveen Core and Templeton Emerging

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

By analyzing existing cross correlation between Nuveen Core Plus and Templeton Emerging Markets, you can compare the effects of market volatilities on Nuveen Core and Templeton Emerging 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 Core with a short position of Templeton Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuveen Core and Templeton Emerging.

Diversification Opportunities for Nuveen Core and Templeton Emerging

0.54

Correlation Coefficient

Nuveen Core  Templeton Emerging

Very weak diversification

The 3 months correlation between Nuveen and Templeton is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen Core Plus and Templeton Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Templeton Emerging and Nuveen Core 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 Core Plus are associated (or correlated) with Templeton Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Templeton Emerging has no effect on the direction of Nuveen Core i.e., Nuveen Core and Templeton Emerging go up and down completely randomly.

Pair Corralation between Nuveen Core and Templeton Emerging

Given the investment horizon of 90 days Nuveen Core Plus is expected to generate 0.49 times more return on investment than Templeton Emerging. However, Nuveen Core Plus is 2.06 times less risky than Templeton Emerging. It trades about 0.02 of its potential returns per unit of risk. Templeton Emerging Markets is currently generating about 0.0 per unit of risk. If you would invest  1,101  in Nuveen Core Plus on September 19, 2024 and sell it today you would earn a total of  2.00  from holding Nuveen Core Plus or generate 0.18% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.45%
Values	Daily Returns

Nuveen Core Plus  vs.  Templeton Emerging Markets

Nuveen Core Plus

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nuveen Core Plus has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental indicators, Nuveen Core is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Templeton Emerging

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Templeton Emerging Markets has generated negative risk-adjusted returns adding no value to fund investors. Despite nearly stable primary indicators, Templeton Emerging is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Nuveen Core and Templeton Emerging

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

The idea behind Nuveen Core Plus and Templeton Emerging Markets 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.