Correlation Between Nuveen Real and Nuveen Preferred
Can any of the company-specific risk be diversified away by investing in both Nuveen Real 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 Real 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 Real Estate and Nuveen Preferred Securities, you can compare the effects of market volatilities on Nuveen Real 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 Real with a short position of Nuveen Preferred. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuveen Real and Nuveen Preferred.
Diversification Opportunities for Nuveen Real and Nuveen Preferred
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Nuveen and Nuveen is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen Real Estate 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 Real 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 Real Estate 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 Real i.e., Nuveen Real and Nuveen Preferred go up and down completely randomly.
Pair Corralation between Nuveen Real and Nuveen Preferred
Assuming the 90 days horizon Nuveen Real Estate is expected to generate 4.95 times more return on investment than Nuveen Preferred. However, Nuveen Real is 4.95 times more volatile than Nuveen Preferred Securities. It trades about 0.09 of its potential returns per unit of risk. Nuveen Preferred Securities is currently generating about 0.26 per unit of risk. If you would invest 1,284 in Nuveen Real Estate on August 25, 2024 and sell it today you would earn a total of 281.00 from holding Nuveen Real Estate or generate 21.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nuveen Real Estate vs. Nuveen Preferred Securities
Performance |
| Timeline |
| Nuveen Real Estate |
| Nuveen Preferred Sec |
Nuveen Real and Nuveen Preferred Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nuveen Real and Nuveen Preferred
The main advantage of trading using opposite Nuveen Real and Nuveen Preferred positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuveen Real 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 Real vs. Realty Income | Nuveen Real vs. Dynex Capital | Nuveen Real vs. First Industrial Realty | Nuveen Real vs. Healthcare Realty Trust |
| 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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