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

0.73

Correlation Coefficient

NuShares ETF  NuShares ETF

Poor diversification

The 3 months correlation between NuShares and NuShares is 0.73. 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 is expected to generate 2.75 times less return on investment than NuShares ETF. In addition to that, NuShares ETF is 1.25 times more volatile than NuShares ETF Trust. It trades about 0.05 of its total potential returns per unit of risk. NuShares ETF Trust is currently generating about 0.18 per unit of volatility. If you would invest  3,000  in NuShares ETF Trust on December 20, 2024 and sell it today you would earn a total of  291.00  from holding NuShares ETF Trust or generate 9.7% return on investment over 90 days.

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

NuShares ETF Trust  vs.  NuShares ETF Trust

NuShares ETF Trust

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in NuShares ETF Trust are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. 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.

NuShares ETF Trust

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in NuShares ETF Trust are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating fundamental indicators, NuShares ETF may actually be approaching a critical reversion point that can send shares even higher in April 2025.

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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.