Correlation Between BNY Mellon and Nuveen Preferred
Can any of the company-specific risk be diversified away by investing in both BNY Mellon and Nuveen Preferred 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 BNY Mellon and Nuveen Preferred into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BNY Mellon High and Nuveen Preferred and, you can compare the effects of market volatilities on BNY Mellon and Nuveen Preferred 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 BNY Mellon with a short position of Nuveen Preferred. Check out your portfolio center. Please also check ongoing floating volatility patterns of BNY Mellon and Nuveen Preferred.
Diversification Opportunities for BNY Mellon and Nuveen Preferred
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between BNY and Nuveen is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding BNY Mellon High and Nuveen Preferred and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Preferred and BNY Mellon 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 BNY Mellon High are associated (or correlated) with Nuveen Preferred. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Preferred has no effect on the direction of BNY Mellon i.e., BNY Mellon and Nuveen Preferred go up and down completely randomly.
Pair Corralation between BNY Mellon and Nuveen Preferred
Considering the 90-day investment horizon BNY Mellon High is expected to generate 1.28 times more return on investment than Nuveen Preferred. However, BNY Mellon is 1.28 times more volatile than Nuveen Preferred and. It trades about 0.05 of its potential returns per unit of risk. Nuveen Preferred and is currently generating about 0.06 per unit of risk. If you would invest 199.00 in BNY Mellon High on January 7, 2025 and sell it today you would earn a total of 31.30 from holding BNY Mellon High or generate 15.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.71% |
| Values | Daily Returns |
BNY Mellon High vs. Nuveen Preferred and
Performance |
| Timeline |
| BNY Mellon High |
| Nuveen Preferred |
BNY Mellon and Nuveen Preferred Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BNY Mellon and Nuveen Preferred
The main advantage of trading using opposite BNY Mellon and Nuveen Preferred positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BNY Mellon position performs unexpectedly, Nuveen Preferred 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 Preferred will offset losses from the drop in Nuveen Preferred's long position.| BNY Mellon vs. Credit Suisse Asset | BNY Mellon vs. Mfs Intermediate High | BNY Mellon vs. Eaton Vance Risk | BNY Mellon vs. Nuveen Floating Rate |
| Nuveen Preferred vs. DTF Tax Free | Nuveen Preferred vs. First Trust High | Nuveen Preferred vs. Blackrock Muniholdings Closed | Nuveen Preferred vs. DWS Municipal Income |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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