Correlation Between Nuveen New and Clough Global

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Can any of the company-specific risk be diversified away by investing in both Nuveen New and Clough Global 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 New and Clough Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nuveen New York and Clough Global Allocation, you can compare the effects of market volatilities on Nuveen New and Clough Global 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 New with a short position of Clough Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuveen New and Clough Global.

Diversification Opportunities for Nuveen New and Clough Global

0.77
  Correlation Coefficient

Poor diversification

The 3 months correlation between Nuveen and Clough is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen New York and Clough Global Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clough Global Allocation and Nuveen New 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 New York are associated (or correlated) with Clough Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clough Global Allocation has no effect on the direction of Nuveen New i.e., Nuveen New and Clough Global go up and down completely randomly.

Pair Corralation between Nuveen New and Clough Global

Considering the 90-day investment horizon Nuveen New is expected to generate 1.03 times less return on investment than Clough Global. But when comparing it to its historical volatility, Nuveen New York is 1.35 times less risky than Clough Global. It trades about 0.38 of its potential returns per unit of risk. Clough Global Allocation is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest  536.00  in Clough Global Allocation on October 24, 2024 and sell it today you would earn a total of  20.00  from holding Clough Global Allocation or generate 3.73% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Nuveen New York  vs.  Clough Global Allocation

 Performance 
       Timeline  
Nuveen New York 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Nuveen New York has generated negative risk-adjusted returns adding no value to fund investors. Despite quite persistent basic indicators, Nuveen New is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.
Clough Global Allocation 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Clough Global Allocation has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly stable essential indicators, Clough Global is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Nuveen New and Clough Global Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Nuveen New and Clough Global

The main advantage of trading using opposite Nuveen New and Clough Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuveen New position performs unexpectedly, Clough Global 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 Clough Global will offset losses from the drop in Clough Global's long position.
The idea behind Nuveen New York and Clough Global Allocation 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.

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