Correlation Between Navigator Equity and Nuveen Infrastructure

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

By analyzing existing cross correlation between Navigator Equity Hedged and Nuveen Infrastructure Income, you can compare the effects of market volatilities on Navigator Equity and Nuveen Infrastructure 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 Navigator Equity with a short position of Nuveen Infrastructure. Check out your portfolio center. Please also check ongoing floating volatility patterns of Navigator Equity and Nuveen Infrastructure.

Diversification Opportunities for Navigator Equity and Nuveen Infrastructure

-0.4

Correlation Coefficient

Navigator Equity  Nuveen Infrastructure

Very good diversification

The 3 months correlation between Navigator and Nuveen is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Navigator Equity Hedged and Nuveen Infrastructure Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Infrastructure and Navigator Equity 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 Navigator Equity Hedged are associated (or correlated) with Nuveen Infrastructure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Infrastructure has no effect on the direction of Navigator Equity i.e., Navigator Equity and Nuveen Infrastructure go up and down completely randomly.

Pair Corralation between Navigator Equity and Nuveen Infrastructure

Assuming the 90 days horizon Navigator Equity is expected to generate 1.96 times less return on investment than Nuveen Infrastructure. In addition to that, Navigator Equity is 1.3 times more volatile than Nuveen Infrastructure Income. It trades about 0.19 of its total potential returns per unit of risk. Nuveen Infrastructure Income is currently generating about 0.48 per unit of volatility. If you would invest  999.00  in Nuveen Infrastructure Income on May 5, 2025 and sell it today you would earn a total of  12.00  from holding Nuveen Infrastructure Income or generate 1.2% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	44.44%
Values	Daily Returns

Navigator Equity Hedged  vs.  Nuveen Infrastructure Income

Navigator Equity Hedged

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Navigator Equity Hedged are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Navigator Equity is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Nuveen Infrastructure

Risk-Adjusted Performance

Very Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Nuveen Infrastructure Income are ranked lower than 37 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Nuveen Infrastructure is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Navigator Equity and Nuveen Infrastructure

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

The idea behind Navigator Equity Hedged and Nuveen Infrastructure Income 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.