Correlation Between Nuveen California and IVH

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

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

Diversification Opportunities for Nuveen California and IVH

0.0

Correlation Coefficient

Nuveen California  IVH

Pay attention - limited upside

The 3 months correlation between Nuveen and IVH is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen California Select and IVH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IVH and Nuveen California 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 California Select are associated (or correlated) with IVH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IVH has no effect on the direction of Nuveen California i.e., Nuveen California and IVH go up and down completely randomly.

Pair Corralation between Nuveen California and IVH

If you would invest  1,301  in Nuveen California Select on December 26, 2024 and sell it today you would earn a total of  13.00  from holding Nuveen California Select or generate 1.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Nuveen California Select  vs.  IVH

Nuveen California Select

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Nuveen California Select are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Nuveen California is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

IVH

Risk-Adjusted Performance

Very Weak

Over the last 90 days IVH has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, IVH is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Nuveen California and IVH

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

The idea behind Nuveen California Select and IVH 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.

Check out your portfolio center.

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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.