Correlation Between Nuveen California and Gabelli Healthcare

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

By analyzing existing cross correlation between Nuveen California Select and Gabelli Healthcare WellnessRx, you can compare the effects of market volatilities on Nuveen California and Gabelli Healthcare 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 California with a short position of Gabelli Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuveen California and Gabelli Healthcare.

Diversification Opportunities for Nuveen California and Gabelli Healthcare

0.76

Correlation Coefficient

Nuveen California  Gabelli Healthcare

Poor diversification

The 3 months correlation between Nuveen and Gabelli is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen California Select and Gabelli Healthcare WellnessRx in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gabelli Healthcare and Nuveen California 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 California Select are associated (or correlated) with Gabelli Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gabelli Healthcare has no effect on the direction of Nuveen California i.e., Nuveen California and Gabelli Healthcare go up and down completely randomly.

Pair Corralation between Nuveen California and Gabelli Healthcare

Considering the 90-day investment horizon Nuveen California Select is expected to generate 0.63 times more return on investment than Gabelli Healthcare. However, Nuveen California Select is 1.58 times less risky than Gabelli Healthcare. It trades about -0.05 of its potential returns per unit of risk. Gabelli Healthcare WellnessRx is currently generating about -0.05 per unit of risk. If you would invest  1,337  in Nuveen California Select on January 14, 2025 and sell it today you would lose (69.00) from holding Nuveen California Select or give up 5.16% of portfolio value over 90 days.

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

Nuveen California Select  vs.  Gabelli Healthcare WellnessRx

Nuveen California Select

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nuveen California Select has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Nuveen California is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Gabelli Healthcare

Risk-Adjusted Performance

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Gabelli Healthcare WellnessRx are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Gabelli Healthcare is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Nuveen California and Gabelli Healthcare

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

The idea behind Nuveen California Select and Gabelli Healthcare WellnessRx 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.