Correlation Between European Equity and Nuveen High
Can any of the company-specific risk be diversified away by investing in both European Equity and Nuveen High 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 European Equity and Nuveen High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between European Equity Closed and Nuveen High Income, you can compare the effects of market volatilities on European Equity and Nuveen High 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 European Equity with a short position of Nuveen High. Check out your portfolio center. Please also check ongoing floating volatility patterns of European Equity and Nuveen High.
Diversification Opportunities for European Equity and Nuveen High
-0.9 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between European and Nuveen is -0.9. Overlapping area represents the amount of risk that can be diversified away by holding European Equity Closed and Nuveen High Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen High Income and European Equity 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 European Equity Closed are associated (or correlated) with Nuveen High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen High Income has no effect on the direction of European Equity i.e., European Equity and Nuveen High go up and down completely randomly.
Pair Corralation between European Equity and Nuveen High
Considering the 90-day investment horizon European Equity is expected to generate 1.04 times less return on investment than Nuveen High. In addition to that, European Equity is 5.14 times more volatile than Nuveen High Income. It trades about 0.02 of its total potential returns per unit of risk. Nuveen High Income is currently generating about 0.1 per unit of volatility. If you would invest 934.00 in Nuveen High Income on August 31, 2024 and sell it today you would earn a total of 5.00 from holding Nuveen High Income or generate 0.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 8.56% |
| Values | Daily Returns |
European Equity Closed vs. Nuveen High Income
Performance |
| Timeline |
| European Equity Closed |
| Nuveen High Income |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
European Equity and Nuveen High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with European Equity and Nuveen High
The main advantage of trading using opposite European Equity and Nuveen High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if European Equity position performs unexpectedly, Nuveen High 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 High will offset losses from the drop in Nuveen High's long position.| European Equity vs. XAI Octagon Floating | European Equity vs. MFS Charter Income | European Equity vs. Nuveen New York | European Equity vs. Invesco High Income |
| Nuveen High vs. MFS Investment Grade | Nuveen High vs. Eaton Vance National | Nuveen High vs. Invesco High Income | Nuveen High vs. Nuveen California Select |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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