Correlation Between Nuveen High and Western Asset
Can any of the company-specific risk be diversified away by investing in both Nuveen High and Western Asset 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 High and Western Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nuveen High Income and Western Asset Managed, you can compare the effects of market volatilities on Nuveen High and Western Asset 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 High with a short position of Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuveen High and Western Asset.
Diversification Opportunities for Nuveen High and Western Asset
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between NUVEEN and Western is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen High Income and Western Asset Managed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset Managed and Nuveen High 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 High Income are associated (or correlated) with Western Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Asset Managed has no effect on the direction of Nuveen High i.e., Nuveen High and Western Asset go up and down completely randomly.
Pair Corralation between Nuveen High and Western Asset
Assuming the 90 days horizon Nuveen High Income is expected to generate 1.12 times more return on investment than Western Asset. However, Nuveen High is 1.12 times more volatile than Western Asset Managed. It trades about 0.16 of its potential returns per unit of risk. Western Asset Managed is currently generating about 0.08 per unit of risk. If you would invest 549.00 in Nuveen High Income on September 4, 2024 and sell it today you would earn a total of 126.00 from holding Nuveen High Income or generate 22.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Nuveen High Income vs. Western Asset Managed
Performance |
| Timeline |
| Nuveen High Income |
| Western Asset Managed |
Nuveen High and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nuveen High and Western Asset
The main advantage of trading using opposite Nuveen High and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuveen High position performs unexpectedly, Western Asset 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 Western Asset will offset losses from the drop in Western Asset's long position.| Nuveen High vs. Nuveen Small Cap | Nuveen High vs. Nuveen Real Estate | Nuveen High vs. Nuveen Real Estate | Nuveen High vs. Nuveen Preferred Securities |
| Western Asset vs. Locorr Longshort Modities | Western Asset vs. Goldman Sachs Short | Western Asset vs. Siit Ultra Short | Western Asset vs. Barings Active Short |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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