Correlation Between Valic Company and Nuveen Strategic

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

By analyzing existing cross correlation between Valic Company I and Nuveen Strategic Municipal, you can compare the effects of market volatilities on Valic Company and Nuveen Strategic 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 Valic Company with a short position of Nuveen Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Valic Company and Nuveen Strategic.

Diversification Opportunities for Valic Company and Nuveen Strategic

0.47

Correlation Coefficient

Valic Company  Nuveen Strategic

Very weak diversification

The 3 months correlation between Valic and Nuveen is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Valic Company I and Nuveen Strategic Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Strategic Mun and Valic Company 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 Valic Company I are associated (or correlated) with Nuveen Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Strategic Mun has no effect on the direction of Valic Company i.e., Valic Company and Nuveen Strategic go up and down completely randomly.

Pair Corralation between Valic Company and Nuveen Strategic

Assuming the 90 days horizon Valic Company I is expected to under-perform the Nuveen Strategic. In addition to that, Valic Company is 4.21 times more volatile than Nuveen Strategic Municipal. It trades about -0.25 of its total potential returns per unit of risk. Nuveen Strategic Municipal is currently generating about -0.26 per unit of volatility. If you would invest  1,015  in Nuveen Strategic Municipal on October 11, 2024 and sell it today you would lose (16.00) from holding Nuveen Strategic Municipal or give up 1.58% of portfolio value over 90 days.

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

Valic Company I  vs.  Nuveen Strategic Municipal

Valic Company I

Risk-Adjusted Performance

0 of 100

Very Weak

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

Nuveen Strategic Mun

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Valic Company and Nuveen Strategic

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

The idea behind Valic Company I and Nuveen Strategic Municipal 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.

Check out your portfolio center.

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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.