Correlation Between Financial and Nuveen Multi
Can any of the company-specific risk be diversified away by investing in both Financial and Nuveen Multi 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 Financial and Nuveen Multi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Financial 15 Split and Nuveen Multi Mrkt, you can compare the effects of market volatilities on Financial and Nuveen Multi 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 Financial with a short position of Nuveen Multi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Financial and Nuveen Multi.
Diversification Opportunities for Financial and Nuveen Multi
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Financial and Nuveen is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Financial 15 Split and Nuveen Multi Mrkt in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Multi Mrkt and Financial 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 Financial 15 Split are associated (or correlated) with Nuveen Multi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Multi Mrkt has no effect on the direction of Financial i.e., Financial and Nuveen Multi go up and down completely randomly.
Pair Corralation between Financial and Nuveen Multi
Assuming the 90 days horizon Financial 15 Split is expected to generate 4.4 times more return on investment than Nuveen Multi. However, Financial is 4.4 times more volatile than Nuveen Multi Mrkt. It trades about 0.07 of its potential returns per unit of risk. Nuveen Multi Mrkt is currently generating about 0.08 per unit of risk. If you would invest 602.00 in Financial 15 Split on September 1, 2024 and sell it today you would earn a total of 126.00 from holding Financial 15 Split or generate 20.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 96.03% |
| Values | Daily Returns |
Financial 15 Split vs. Nuveen Multi Mrkt
Performance |
| Timeline |
| Financial 15 Split |
| Nuveen Multi Mrkt |
Financial and Nuveen Multi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Financial and Nuveen Multi
The main advantage of trading using opposite Financial and Nuveen Multi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Financial position performs unexpectedly, Nuveen Multi 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 Multi will offset losses from the drop in Nuveen Multi's long position.| Financial vs. SEI Investments | Financial vs. Oxford Lane Capital | Financial vs. Blackstone Group | Financial vs. North American Financial |
| Nuveen Multi vs. Invesco High Income | Nuveen Multi vs. MFS Investment Grade | Nuveen Multi vs. Eaton Vance National | Nuveen Multi vs. Abrdn Emerging Markets |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
| Transaction History View history of all your transactions and understand their impact on performance | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. |