Correlation Between Nuveen Small and Nuveen Dividend

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

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

Diversification Opportunities for Nuveen Small and Nuveen Dividend

0.96

Correlation Coefficient

Nuveen Small  Nuveen Dividend

Almost no diversification

The 3 months correlation between Nuveen and Nuveen is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen Small Cap 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 Nuveen Small 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 Small Cap 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 Nuveen Small i.e., Nuveen Small and Nuveen Dividend go up and down completely randomly.

Pair Corralation between Nuveen Small and Nuveen Dividend

Assuming the 90 days horizon Nuveen Small Cap is expected to generate 1.57 times more return on investment than Nuveen Dividend. However, Nuveen Small is 1.57 times more volatile than Nuveen Dividend Value. It trades about 0.17 of its potential returns per unit of risk. Nuveen Dividend Value is currently generating about 0.25 per unit of risk. If you would invest  2,794  in Nuveen Small Cap on April 24, 2025 and sell it today you would earn a total of  322.00  from holding Nuveen Small Cap or generate 11.52% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	98.39%
Values	Daily Returns

Nuveen Small Cap  vs.  Nuveen Dividend Value

Nuveen Small Cap

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Nuveen Small Cap are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Nuveen Small may actually be approaching a critical reversion point that can send shares even higher in August 2025.

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 19 (%) 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 August 2025.

Pair Trading with Nuveen Small and Nuveen Dividend

The main advantage of trading using opposite Nuveen Small and Nuveen Dividend positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuveen Small 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 Nuveen Small Cap 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.