Correlation Between Bank of America and Nuveen Senior
Can any of the company-specific risk be diversified away by investing in both Bank of America and Nuveen Senior 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 Senior 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 Senior Income, you can compare the effects of market volatilities on Bank of America and Nuveen Senior 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 Senior. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Nuveen Senior.
Diversification Opportunities for Bank of America and Nuveen Senior
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bank and Nuveen is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Nuveen Senior Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Senior Income 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 Senior. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Senior Income has no effect on the direction of Bank of America i.e., Bank of America and Nuveen Senior go up and down completely randomly.
Pair Corralation between Bank of America and Nuveen Senior
If you would invest 4,234 in Bank of America on August 24, 2024 and sell it today you would earn a total of 466.00 from holding Bank of America or generate 11.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 4.35% |
| Values | Daily Returns |
Bank of America vs. Nuveen Senior Income
Performance |
| Timeline |
| Bank of America |
| Nuveen Senior Income |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Bank of America and Nuveen Senior Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Nuveen Senior
The main advantage of trading using opposite Bank of America and Nuveen Senior positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Nuveen Senior 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 Senior will offset losses from the drop in Nuveen Senior's long position.| Bank of America vs. Amtech Systems | Bank of America vs. Gold Fields Ltd | Bank of America vs. Aegean Airlines SA | Bank of America vs. Merck Company |
| Nuveen Senior vs. Nuveen Floating Rate | Nuveen Senior vs. Pioneer Floating Rate | Nuveen Senior vs. BlackRock Floating Rate | Nuveen Senior vs. Blackrock Floating Rate |
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 Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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