Correlation Between Nuveen Santa and Vanguard Total

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

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

Diversification Opportunities for Nuveen Santa and Vanguard Total

0.91

Correlation Coefficient

Nuveen Santa  Vanguard Total

Almost no diversification

The 3 months correlation between Nuveen and Vanguard is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen Santa Barbara and Vanguard Total International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Total Inter and Nuveen Santa 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 Santa Barbara are associated (or correlated) with Vanguard Total. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Total Inter has no effect on the direction of Nuveen Santa i.e., Nuveen Santa and Vanguard Total go up and down completely randomly.

Pair Corralation between Nuveen Santa and Vanguard Total

Assuming the 90 days horizon Nuveen Santa Barbara is expected to under-perform the Vanguard Total. In addition to that, Nuveen Santa is 1.05 times more volatile than Vanguard Total International. It trades about -0.32 of its total potential returns per unit of risk. Vanguard Total International is currently generating about -0.14 per unit of volatility. If you would invest  12,801  in Vanguard Total International on January 17, 2024 and sell it today you would lose (220.00) from holding Vanguard Total International or give up 1.72% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	95.24%
Values	Daily Returns

Nuveen Santa Barbara  vs.  Vanguard Total International

Nuveen Santa Barbara

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Nuveen Santa Barbara are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Nuveen Santa is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Vanguard Total Inter

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Vanguard Total International are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Vanguard Total is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Nuveen Santa and Vanguard Total

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

The idea behind Nuveen Santa Barbara and Vanguard Total International 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.

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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.