Correlation Between Gold and Nuveen High

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

By analyzing existing cross correlation between Gold And Precious and Nuveen High Income, you can compare the effects of market volatilities on Gold and Nuveen High 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 Gold with a short position of Nuveen High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gold and Nuveen High.

Diversification Opportunities for Gold and Nuveen High

0.81

Correlation Coefficient

Gold  Nuveen High

Very poor diversification

The 3 months correlation between Gold and Nuveen is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Gold And Precious and Nuveen High Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen High Income and Gold 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 Gold And Precious are associated (or correlated) with Nuveen High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen High Income has no effect on the direction of Gold i.e., Gold and Nuveen High go up and down completely randomly.

Pair Corralation between Gold and Nuveen High

Assuming the 90 days horizon Gold And Precious is expected to generate 12.25 times more return on investment than Nuveen High. However, Gold is 12.25 times more volatile than Nuveen High Income. It trades about 0.04 of its potential returns per unit of risk. Nuveen High Income is currently generating about -0.05 per unit of risk. If you would invest  1,284  in Gold And Precious on December 2, 2024 and sell it today you would earn a total of  13.00  from holding Gold And Precious or generate 1.01% return on investment over 90 days.

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

Gold And Precious  vs.  Nuveen High Income

Gold And Precious

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Gold And Precious are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Gold may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Nuveen High Income

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Nuveen High Income are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Nuveen High is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Gold and Nuveen High

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

The idea behind Gold And Precious and Nuveen High Income 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.