Correlation Between Nuveen California and Marygold Companies

Can any of the company-specific risk be diversified away by investing in both Nuveen California and Marygold Companies 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 Marygold Companies 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 Marygold Companies, you can compare the effects of market volatilities on Nuveen California and Marygold Companies 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 Marygold Companies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuveen California and Marygold Companies.

Diversification Opportunities for Nuveen California and Marygold Companies

-0.43

Correlation Coefficient

Nuveen California  Marygold Companies

Very good diversification

The 3 months correlation between Nuveen and Marygold is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen California Select and Marygold Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marygold Companies 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 Marygold Companies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marygold Companies has no effect on the direction of Nuveen California i.e., Nuveen California and Marygold Companies go up and down completely randomly.

Pair Corralation between Nuveen California and Marygold Companies

Considering the 90-day investment horizon Nuveen California is expected to generate 33.85 times less return on investment than Marygold Companies. But when comparing it to its historical volatility, Nuveen California Select is 7.84 times less risky than Marygold Companies. It trades about 0.01 of its potential returns per unit of risk. Marygold Companies is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  154.00  in Marygold Companies on October 8, 2024 and sell it today you would earn a total of  26.95  from holding Marygold Companies or generate 17.5% return on investment over 90 days.

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

Nuveen California Select  vs.  Marygold Companies

Nuveen California Select

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nuveen California Select has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest inconsistent performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Marygold Companies

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Marygold Companies are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather inconsistent essential indicators, Marygold Companies exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Nuveen California and Marygold Companies

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

The idea behind Nuveen California Select and Marygold Companies 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.