Correlation Between Nuveen Louisiana and Nuveen Preferred
Can any of the company-specific risk be diversified away by investing in both Nuveen Louisiana 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 Nuveen Louisiana and Nuveen Preferred into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nuveen Louisiana Municipal and Nuveen Preferred Securities, you can compare the effects of market volatilities on Nuveen Louisiana 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 Nuveen Louisiana with a short position of Nuveen Preferred. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuveen Louisiana and Nuveen Preferred.
Diversification Opportunities for Nuveen Louisiana and Nuveen Preferred
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nuveen and Nuveen is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen Louisiana Municipal and Nuveen Preferred Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Preferred Sec and Nuveen Louisiana 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 Nuveen Louisiana Municipal 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 Sec has no effect on the direction of Nuveen Louisiana i.e., Nuveen Louisiana and Nuveen Preferred go up and down completely randomly.
Pair Corralation between Nuveen Louisiana and Nuveen Preferred
Assuming the 90 days horizon Nuveen Louisiana Municipal is expected to generate 2.2 times more return on investment than Nuveen Preferred. However, Nuveen Louisiana is 2.2 times more volatile than Nuveen Preferred Securities. It trades about 0.03 of its potential returns per unit of risk. Nuveen Preferred Securities is currently generating about -0.05 per unit of risk. If you would invest 1,054 in Nuveen Louisiana Municipal on August 23, 2024 and sell it today you would earn a total of 2.00 from holding Nuveen Louisiana Municipal or generate 0.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Nuveen Louisiana Municipal vs. Nuveen Preferred Securities
Performance |
| Timeline |
| Nuveen Louisiana Mun |
| Nuveen Preferred Sec |
Nuveen Louisiana and Nuveen Preferred Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nuveen Louisiana and Nuveen Preferred
The main advantage of trading using opposite Nuveen Louisiana and Nuveen Preferred positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuveen Louisiana 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.| Nuveen Louisiana vs. Barings Global Floating | Nuveen Louisiana vs. Alliancebernstein Global High | Nuveen Louisiana vs. Dreyfusstandish Global Fixed | Nuveen Louisiana vs. Artisan Global Unconstrained |
| Nuveen Preferred vs. Pimco Mortgage Opportunities | Nuveen Preferred vs. Cohen Steers Preferred | Nuveen Preferred vs. Jpmorgan Mortgage Backed Securities | Nuveen Preferred vs. Muzinich Low Duration |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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