Correlation Between Nuveen Large and Basic Materials
Can any of the company-specific risk be diversified away by investing in both Nuveen Large and Basic Materials 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 Basic Materials 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 Basic Materials Fund, you can compare the effects of market volatilities on Nuveen Large and Basic Materials 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 Basic Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuveen Large and Basic Materials.
Diversification Opportunities for Nuveen Large and Basic Materials
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Nuveen and Basic is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen Large Cap and Basic Materials Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Basic Materials 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 Basic Materials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Basic Materials has no effect on the direction of Nuveen Large i.e., Nuveen Large and Basic Materials go up and down completely randomly.
Pair Corralation between Nuveen Large and Basic Materials
Assuming the 90 days horizon Nuveen Large Cap is expected to generate 0.77 times more return on investment than Basic Materials. However, Nuveen Large Cap is 1.29 times less risky than Basic Materials. It trades about 0.05 of its potential returns per unit of risk. Basic Materials Fund is currently generating about 0.04 per unit of risk. If you would invest 3,402 in Nuveen Large Cap on June 6, 2025 and sell it today you would earn a total of 975.00 from holding Nuveen Large Cap or generate 28.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.8% |
| Values | Daily Returns |
Nuveen Large Cap vs. Basic Materials Fund
Performance |
| Timeline |
| Nuveen Large Cap |
| Basic Materials |
Nuveen Large and Basic Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nuveen Large and Basic Materials
The main advantage of trading using opposite Nuveen Large and Basic Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuveen Large position performs unexpectedly, Basic Materials 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 Basic Materials will offset losses from the drop in Basic Materials' long position.| Nuveen Large vs. Nuveen Large Cap | Nuveen Large vs. Nuveen Large Cap | Nuveen Large vs. Lazard Equity Centrated | Nuveen Large vs. Guggenheim Styleplus |
| Basic Materials vs. Nuveen Nwq Smallmid Cap | Basic Materials vs. Goldman Sachs Small | Basic Materials vs. Touchstone Small Cap | Basic Materials vs. Lebenthal Lisanti Small |
Check out your portfolio center.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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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