Correlation Between Bank of America and Nuveen Real
Can any of the company-specific risk be diversified away by investing in both Bank of America and Nuveen Real 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 Bank of America and Nuveen Real into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank of America and Nuveen Real Estate, you can compare the effects of market volatilities on Bank of America and Nuveen Real 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 Bank of America with a short position of Nuveen Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Nuveen Real.
Diversification Opportunities for Bank of America and Nuveen Real
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bank and Nuveen is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Nuveen Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Real Estate and Bank of America 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 Bank of America are associated (or correlated) with Nuveen Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Real Estate has no effect on the direction of Bank of America i.e., Bank of America and Nuveen Real go up and down completely randomly.
Pair Corralation between Bank of America and Nuveen Real
Considering the 90-day investment horizon Bank of America is expected to generate 1.49 times less return on investment than Nuveen Real. In addition to that, Bank of America is 1.46 times more volatile than Nuveen Real Estate. It trades about 0.11 of its total potential returns per unit of risk. Nuveen Real Estate is currently generating about 0.23 per unit of volatility. If you would invest 709.00 in Nuveen Real Estate on August 29, 2024 and sell it today you would earn a total of 246.00 from holding Nuveen Real Estate or generate 34.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of America vs. Nuveen Real Estate
Performance |
| Timeline |
| Bank of America |
| Nuveen Real Estate |
Bank of America and Nuveen Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Nuveen Real
The main advantage of trading using opposite Bank of America and Nuveen Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Nuveen Real 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 Real will offset losses from the drop in Nuveen Real's long position.| Bank of America vs. Nu Holdings | Bank of America vs. HSBC Holdings PLC | Bank of America vs. Bank of Nova |
| Nuveen Real vs. Nuveen Global High | Nuveen Real vs. Advent Claymore Convertible | Nuveen Real vs. Blackstone Gso Strategic | Nuveen Real vs. Neuberger Berman High |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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