Correlation Between Nuveen Large and Federated Strategic

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

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

Diversification Opportunities for Nuveen Large and Federated Strategic

0.9

Correlation Coefficient

Nuveen Large  Federated Strategic

Almost no diversification

The 3 months correlation between Nuveen and Federated is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen Large Cap and Federated Strategic Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Strategic Value and Nuveen Large 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 Large Cap are associated (or correlated) with Federated Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Strategic Value has no effect on the direction of Nuveen Large i.e., Nuveen Large and Federated Strategic go up and down completely randomly.

Pair Corralation between Nuveen Large and Federated Strategic

Assuming the 90 days horizon Nuveen Large Cap is expected to generate 1.14 times more return on investment than Federated Strategic. However, Nuveen Large is 1.14 times more volatile than Federated Strategic Value. It trades about 0.23 of its potential returns per unit of risk. Federated Strategic Value is currently generating about 0.09 per unit of risk. If you would invest  3,779  in Nuveen Large Cap on May 7, 2025 and sell it today you would earn a total of  438.00  from holding Nuveen Large Cap or generate 11.59% return on investment over 90 days.

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

Nuveen Large Cap  vs.  Federated Strategic Value

Nuveen Large Cap

Risk-Adjusted Performance

Solid

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

Federated Strategic Value

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Federated Strategic Value are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Federated 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 Nuveen Large and Federated Strategic

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

The idea behind Nuveen Large Cap and Federated Strategic 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.