Correlation Between Nuveen Nwq and Fidelity Advisor

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

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

Diversification Opportunities for Nuveen Nwq and Fidelity Advisor

0.47

Correlation Coefficient

Nuveen Nwq  Fidelity Advisor

Very weak diversification

The 3 months correlation between Nuveen and Fidelity is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen Nwq Small Cap and Fidelity Advisor Large in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Advisor Large and Nuveen Nwq 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 Nwq Small Cap are associated (or correlated) with Fidelity Advisor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Advisor Large has no effect on the direction of Nuveen Nwq i.e., Nuveen Nwq and Fidelity Advisor go up and down completely randomly.

Pair Corralation between Nuveen Nwq and Fidelity Advisor

Assuming the 90 days horizon Nuveen Nwq Small Cap is expected to under-perform the Fidelity Advisor. In addition to that, Nuveen Nwq is 6.76 times more volatile than Fidelity Advisor Large. It trades about -0.31 of its total potential returns per unit of risk. Fidelity Advisor Large is currently generating about -0.16 per unit of volatility. If you would invest  5,603  in Fidelity Advisor Large on September 24, 2024 and sell it today you would lose (136.00) from holding Fidelity Advisor Large or give up 2.43% of portfolio value over 90 days.

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

Nuveen Nwq Small Cap  vs.  Fidelity Advisor Large

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 fundamental indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Fidelity Advisor Large

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Advisor Large are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong essential indicators, Fidelity Advisor is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Nuveen Nwq and Fidelity Advisor

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

The idea behind Nuveen Nwq Small Cap and Fidelity Advisor Large 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.