Correlation Between Nuveen Strategic and Invesco Global

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

By analyzing existing cross correlation between Nuveen Strategic Municipal and Invesco Global Real, you can compare the effects of market volatilities on Nuveen Strategic and Invesco 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 Strategic with a short position of Invesco Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuveen Strategic and Invesco Global.

Diversification Opportunities for Nuveen Strategic and Invesco Global

0.23

Correlation Coefficient

Nuveen Strategic  Invesco Global

Modest diversification

The 3 months correlation between Nuveen and Invesco is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen Strategic Municipal and Invesco Global Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Global Real and Nuveen Strategic 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 Strategic Municipal are associated (or correlated) with Invesco Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Global Real has no effect on the direction of Nuveen Strategic i.e., Nuveen Strategic and Invesco Global go up and down completely randomly.

Pair Corralation between Nuveen Strategic and Invesco Global

Assuming the 90 days horizon Nuveen Strategic Municipal is expected to generate 0.25 times more return on investment than Invesco Global. However, Nuveen Strategic Municipal is 3.95 times less risky than Invesco Global. It trades about 0.08 of its potential returns per unit of risk. Invesco Global Real is currently generating about 0.0 per unit of risk. If you would invest  954.00  in Nuveen Strategic Municipal on October 9, 2024 and sell it today you would earn a total of  45.00  from holding Nuveen Strategic Municipal or generate 4.72% return on investment over 90 days.

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

Nuveen Strategic Municipal  vs.  Invesco Global Real

Nuveen Strategic Mun

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nuveen Strategic Municipal has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Nuveen Strategic is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Invesco Global Real

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Invesco Global Real has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Nuveen Strategic and Invesco Global

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

The idea behind Nuveen Strategic Municipal and Invesco Global Real 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.