Correlation Between Spire Global and Nuveen Short

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

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

Diversification Opportunities for Spire Global and Nuveen Short

0.19

Correlation Coefficient

Spire Global  Nuveen Short

Average diversification

The 3 months correlation between Spire and Nuveen is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Spire Global and Nuveen Short Term REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Short Term and Spire Global 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 Spire Global are associated (or correlated) with Nuveen Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Short Term has no effect on the direction of Spire Global i.e., Spire Global and Nuveen Short go up and down completely randomly.

Pair Corralation between Spire Global and Nuveen Short

Given the investment horizon of 90 days Spire Global is expected to generate 5.01 times more return on investment than Nuveen Short. However, Spire Global is 5.01 times more volatile than Nuveen Short Term REIT. It trades about 0.05 of its potential returns per unit of risk. Nuveen Short Term REIT is currently generating about 0.04 per unit of risk. If you would invest  960.00  in Spire Global on September 5, 2024 and sell it today you would earn a total of  517.00  from holding Spire Global or generate 53.85% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

Spire Global  vs.  Nuveen Short Term REIT

Spire Global

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Spire Global are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating forward indicators, Spire Global reported solid returns over the last few months and may actually be approaching a breakup point.

Nuveen Short Term

Risk-Adjusted Performance

3 of 100

Insignificant

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

Pair Trading with Spire Global and Nuveen Short

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

The idea behind Spire Global and Nuveen Short Term REIT 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.