Correlation Between Chevron Corp and Nuveen Senior
Can any of the company-specific risk be diversified away by investing in both Chevron Corp 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 Chevron Corp and Nuveen Senior into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chevron Corp and Nuveen Senior Income, you can compare the effects of market volatilities on Chevron Corp 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 Chevron Corp with a short position of Nuveen Senior. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chevron Corp and Nuveen Senior.
Diversification Opportunities for Chevron Corp and Nuveen Senior
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Chevron and Nuveen is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Chevron Corp 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 Chevron Corp 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 Chevron Corp 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 Chevron Corp i.e., Chevron Corp and Nuveen Senior go up and down completely randomly.
Pair Corralation between Chevron Corp and Nuveen Senior
Considering the 90-day investment horizon Chevron Corp is expected to generate 2.43 times less return on investment than Nuveen Senior. In addition to that, Chevron Corp is 2.44 times more volatile than Nuveen Senior Income. It trades about 0.02 of its total potential returns per unit of risk. Nuveen Senior Income is currently generating about 0.14 per unit of volatility. If you would invest 446.00 in Nuveen Senior Income on August 31, 2024 and sell it today you would earn a total of 10.00 from holding Nuveen Senior Income or generate 2.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 8.56% |
| Values | Daily Returns |
Chevron Corp vs. Nuveen Senior Income
Performance |
| Timeline |
| Chevron Corp |
| Nuveen Senior Income |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Chevron Corp and Nuveen Senior Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chevron Corp and Nuveen Senior
The main advantage of trading using opposite Chevron Corp and Nuveen Senior positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chevron Corp 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.| Chevron Corp vs. RLJ Lodging Trust | Chevron Corp vs. Aquagold International | Chevron Corp vs. Stepstone Group | Chevron Corp vs. Morningstar Unconstrained Allocation |
| 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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