Correlation Between NuShares ETF and NuShares ETF

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

By analyzing existing cross correlation between NuShares ETF Trust and NuShares ETF Trust, you can compare the effects of market volatilities on NuShares ETF and NuShares ETF 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 NuShares ETF with a short position of NuShares ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of NuShares ETF and NuShares ETF.

Diversification Opportunities for NuShares ETF and NuShares ETF

0.93

Correlation Coefficient

NuShares ETF  NuShares ETF

Almost no diversification

The 3 months correlation between NuShares and NuShares is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding NuShares ETF Trust and NuShares ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NuShares ETF Trust and NuShares ETF 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 NuShares ETF Trust are associated (or correlated) with NuShares ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NuShares ETF Trust has no effect on the direction of NuShares ETF i.e., NuShares ETF and NuShares ETF go up and down completely randomly.

Pair Corralation between NuShares ETF and NuShares ETF

Given the investment horizon of 90 days NuShares ETF Trust is expected to generate 0.72 times more return on investment than NuShares ETF. However, NuShares ETF Trust is 1.39 times less risky than NuShares ETF. It trades about 0.04 of its potential returns per unit of risk. NuShares ETF Trust is currently generating about 0.02 per unit of risk. If you would invest  2,626  in NuShares ETF Trust on October 11, 2024 and sell it today you would earn a total of  400.00  from holding NuShares ETF Trust or generate 15.23% return on investment over 90 days.

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

NuShares ETF Trust  vs.  NuShares ETF Trust

NuShares ETF Trust

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NuShares ETF Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental indicators, NuShares ETF is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

NuShares ETF Trust

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NuShares ETF Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, NuShares ETF is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with NuShares ETF and NuShares ETF

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

The idea behind NuShares ETF Trust and NuShares ETF Trust 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.