Correlation Between Nuveen Dividend and Energy Basic

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

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

Diversification Opportunities for Nuveen Dividend and Energy Basic

0.77

Correlation Coefficient

Nuveen Dividend  Energy Basic

Poor diversification

The 3 months correlation between Nuveen and Energy is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen Dividend Value and Energy Basic Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Energy Basic Materials and Nuveen Dividend 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 Nuveen Dividend Value are associated (or correlated) with Energy Basic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Energy Basic Materials has no effect on the direction of Nuveen Dividend i.e., Nuveen Dividend and Energy Basic go up and down completely randomly.

Pair Corralation between Nuveen Dividend and Energy Basic

Assuming the 90 days horizon Nuveen Dividend Value is expected to generate 0.67 times more return on investment than Energy Basic. However, Nuveen Dividend Value is 1.5 times less risky than Energy Basic. It trades about 0.24 of its potential returns per unit of risk. Energy Basic Materials is currently generating about 0.13 per unit of risk. If you would invest  1,425  in Nuveen Dividend Value on May 26, 2025 and sell it today you would earn a total of  133.00  from holding Nuveen Dividend Value or generate 9.33% return on investment over 90 days.

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

Nuveen Dividend Value  vs.  Energy Basic Materials

Nuveen Dividend Value

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Nuveen Dividend Value are ranked lower than 18 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Nuveen Dividend may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Energy Basic Materials

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Energy Basic Materials are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Energy Basic may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Nuveen Dividend and Energy Basic

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

The idea behind Nuveen Dividend Value and Energy Basic Materials 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..