Correlation Between Nuveen New and Mid-cap Value

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

Diversification Opportunities for Nuveen New and Mid-cap Value

0.35

Correlation Coefficient

Nuveen New  Mid-cap Value

Weak diversification

The 3 months correlation between Nuveen and Mid-cap is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen New Jersey and Mid Cap Value Profund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mid Cap Value 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 Mid-cap Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mid Cap Value has no effect on the direction of Nuveen New i.e., Nuveen New and Mid-cap Value go up and down completely randomly.

Pair Corralation between Nuveen New and Mid-cap Value

Considering the 90-day investment horizon Nuveen New Jersey is expected to generate 0.58 times more return on investment than Mid-cap Value. However, Nuveen New Jersey is 1.72 times less risky than Mid-cap Value. It trades about 0.0 of its potential returns per unit of risk. Mid Cap Value Profund is currently generating about -0.07 per unit of risk. If you would invest  1,174  in Nuveen New Jersey on December 29, 2024 and sell it today you would lose (2.00) from holding Nuveen New Jersey or give up 0.17% of portfolio value over 90 days.

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

Nuveen New Jersey  vs.  Mid Cap Value Profund

Nuveen New Jersey

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nuveen New Jersey has generated negative risk-adjusted returns adding no value to fund investors. 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.

Mid Cap Value

Risk-Adjusted Performance

Very Weak

Over the last 90 days Mid Cap Value Profund has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Mid-cap Value is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Nuveen New and Mid-cap Value

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

The idea behind Nuveen New Jersey and Mid Cap Value Profund 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.