We study the dependence of the magnetic properties of Co-Pd nanoclusters (Co cores coated by Pd atoms) on size and relative composition. We consider Co-Pd clusters having closed shell cubo-octahedral structure with an increasing Co core size. The electronic and magnetic properties are calculated with a parametrized Hubbard Hamiltonian within the unrestricted Hartree-Fock approximation. We show that, depending on the relative composition, the Pd coating can give rise to an enhancement of the average magnetic moment of the Co core. We compare with results from slabs by using an ab initio calculation method. (© 2005 WILEY-VCH Verlag GmbH & Co. KGaA, Weinheim)