Correlation Between Vanguard Federal and Nuveen Dividend

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

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

Diversification Opportunities for Vanguard Federal and Nuveen Dividend

-0.57

Correlation Coefficient

Vanguard Federal  Nuveen Dividend

Excellent diversification

The 3 months correlation between Vanguard and Nuveen is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Federal Money and Nuveen Dividend Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Dividend Value and Vanguard Federal 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 Vanguard Federal Money are associated (or correlated) with Nuveen Dividend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Dividend Value has no effect on the direction of Vanguard Federal i.e., Vanguard Federal and Nuveen Dividend go up and down completely randomly.

Pair Corralation between Vanguard Federal and Nuveen Dividend

If you would invest  100.00  in Vanguard Federal Money on December 4, 2024 and sell it today you would earn a total of  0.00  from holding Vanguard Federal Money or generate 0.0% return on investment over 90 days.

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

Vanguard Federal Money  vs.  Nuveen Dividend Value

Vanguard Federal Money

Risk-Adjusted Performance

Very Weak

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

Nuveen Dividend Value

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nuveen Dividend Value has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Vanguard Federal and Nuveen Dividend

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

The idea behind Vanguard Federal Money and Nuveen Dividend Value 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.