Correlation Between Nuveen New and Buffalo Dividend

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

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

Diversification Opportunities for Nuveen New and Buffalo Dividend

-0.44

Correlation Coefficient

Nuveen New  Buffalo Dividend

Very good diversification

The 3 months correlation between Nuveen and Buffalo is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen New Jersey and Buffalo Dividend Focus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Buffalo Dividend Focus and Nuveen New 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 New Jersey are associated (or correlated) with Buffalo Dividend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Buffalo Dividend Focus has no effect on the direction of Nuveen New i.e., Nuveen New and Buffalo Dividend go up and down completely randomly.

Pair Corralation between Nuveen New and Buffalo Dividend

Considering the 90-day investment horizon Nuveen New is expected to generate 12.09 times less return on investment than Buffalo Dividend. But when comparing it to its historical volatility, Nuveen New Jersey is 1.14 times less risky than Buffalo Dividend. It trades about 0.02 of its potential returns per unit of risk. Buffalo Dividend Focus is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest  3,093  in Buffalo Dividend Focus on September 3, 2024 and sell it today you would earn a total of  310.00  from holding Buffalo Dividend Focus or generate 10.02% return on investment over 90 days.

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

Nuveen New Jersey  vs.  Buffalo Dividend Focus

Nuveen New Jersey

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Nuveen New Jersey are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. Even with relatively steady basic indicators, Nuveen New is not utilizing all of its potentials. The current stock price chaos, may contribute to medium-term losses for the stakeholders.

Buffalo Dividend Focus

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Buffalo Dividend Focus are ranked lower than 19 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Buffalo Dividend may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Nuveen New and Buffalo Dividend

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

The idea behind Nuveen New Jersey and Buffalo Dividend Focus 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.