Correlation Between SPDR SP and Nuveen Growth

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

By analyzing existing cross correlation between SPDR SP 500 and Nuveen Growth Opportunities, you can compare the effects of market volatilities on SPDR SP and Nuveen Growth 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 SPDR SP with a short position of Nuveen Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR SP and Nuveen Growth.

Diversification Opportunities for SPDR SP and Nuveen Growth

0.88

Correlation Coefficient

SPDR SP  Nuveen Growth

Very poor diversification

The 3 months correlation between SPDR and Nuveen is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding SPDR SP 500 and Nuveen Growth Opportunities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Growth Opport and SPDR SP 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 SPDR SP 500 are associated (or correlated) with Nuveen Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Growth Opport has no effect on the direction of SPDR SP i.e., SPDR SP and Nuveen Growth go up and down completely randomly.

Pair Corralation between SPDR SP and Nuveen Growth

Considering the 90-day investment horizon SPDR SP 500 is expected to under-perform the Nuveen Growth. But the etf apears to be less risky and, when comparing its historical volatility, SPDR SP 500 is 1.31 times less risky than Nuveen Growth. The etf trades about -0.11 of its potential returns per unit of risk. The Nuveen Growth Opportunities is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  3,530  in Nuveen Growth Opportunities on October 10, 2024 and sell it today you would lose (37.00) from holding Nuveen Growth Opportunities or give up 1.05% of portfolio value over 90 days.

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

SPDR SP 500  vs.  Nuveen Growth Opportunities

SPDR SP 500

Risk-Adjusted Performance

4 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in SPDR SP 500 are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, SPDR SP is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Nuveen Growth Opport

Risk-Adjusted Performance

6 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Nuveen Growth Opportunities are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy technical and fundamental indicators, Nuveen Growth is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with SPDR SP and Nuveen Growth

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

The idea behind SPDR SP 500 and Nuveen Growth Opportunities 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 CEOs Directory module to screen CEOs from public companies around the world.