Correlation Between Visa and Nuveen Symphony

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

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

Diversification Opportunities for Visa and Nuveen Symphony

0.49

Correlation Coefficient

Visa  Nuveen Symphony

Very weak diversification

The 3 months correlation between Visa and Nuveen is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Nuveen Symphony Credit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Symphony Credit and Visa 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 Visa Class A are associated (or correlated) with Nuveen Symphony. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Symphony Credit has no effect on the direction of Visa i.e., Visa and Nuveen Symphony go up and down completely randomly.

Pair Corralation between Visa and Nuveen Symphony

Taking into account the 90-day investment horizon Visa Class A is expected to generate 3.1 times more return on investment than Nuveen Symphony. However, Visa is 3.1 times more volatile than Nuveen Symphony Credit. It trades about 0.05 of its potential returns per unit of risk. Nuveen Symphony Credit is currently generating about 0.06 per unit of risk. If you would invest  20,205  in Visa Class A on January 25, 2024 and sell it today you would earn a total of  7,206  from holding Visa Class A or generate 35.66% return on investment over 90 days.

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

Visa Class A  vs.  Nuveen Symphony Credit

Visa Class A

Risk-Adjusted Performance

1 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Visa Class A are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Visa is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Nuveen Symphony Credit

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Nuveen Symphony Credit are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Nuveen Symphony is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Visa and Nuveen Symphony

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

The idea behind Visa Class A and Nuveen Symphony Credit 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.