Correlation Between Aave and Nuveen Santa

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

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

Diversification Opportunities for Aave and Nuveen Santa

0.0
  Correlation Coefficient
Aave
Nuveen Santa Barbara

Pay attention - limited upside

The 3 months correlation between Aave and Nuveen is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Aave and Nuveen Santa Barbara in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Santa Barbara and Aave 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 Aave are associated (or correlated) with Nuveen Santa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Santa Barbara has no effect on the direction of Aave i.e., Aave and Nuveen Santa go up and down completely randomly.

Pair Corralation between Aave and Nuveen Santa

If you would invest  0.00  in Aave on July 24, 2021 and sell it today you would earn a total of  31,579  from holding Aave or generate 9.223372036854776E16% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

Aave  vs.  Nuveen Santa Barbara

 Performance (%) 
      Timeline 
Aave 
 Aave Performance
3 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Aave are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Aave sustained solid returns over the last few months and may actually be approaching a breakup point.

Aave Price Channel

Nuveen Santa Barbara 
 Nuveen Performance
0 of 100
Over the last 90 days Nuveen Santa Barbara has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Nuveen Santa is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Aave and Nuveen Santa Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Aave and Nuveen Santa

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

Nuveen Santa Barbara

Pair trading matchups for Nuveen Santa

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The effect of pair diversification on risk is to reduce it, but we should note this doesn't apply to all risk types. When we trade pairs against Nuveen Santa as a counterpart, there is always some inherent risk that will never be diversified away no matter what. This volatility limits the effect of tactical diversification using pair trading. Nuveen Santa's systematic risk is the inherent uncertainty of the entire market, and therefore cannot be mitigated even by pair-trading it against the equity that is not highly correlated to it. On the other hand, Nuveen Santa's unsystematic risk describes the types of risk that we can protect against, at least to some degree, by selecting a matching pair that is not perfectly correlated to Nuveen Santa Barbara.
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.

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