Correlation Between First Trust and Nuveen Floating
Can any of the company-specific risk be diversified away by investing in both First Trust and Nuveen Floating 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 First Trust and Nuveen Floating into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Trust High and Nuveen Floating Rate, you can compare the effects of market volatilities on First Trust and Nuveen Floating 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 First Trust with a short position of Nuveen Floating. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Trust and Nuveen Floating.
Diversification Opportunities for First Trust and Nuveen Floating
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between First and Nuveen is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding First Trust High and Nuveen Floating Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Floating Rate and First Trust 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 First Trust High are associated (or correlated) with Nuveen Floating. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Floating Rate has no effect on the direction of First Trust i.e., First Trust and Nuveen Floating go up and down completely randomly.
Pair Corralation between First Trust and Nuveen Floating
Considering the 90-day investment horizon First Trust High is expected to generate 0.95 times more return on investment than Nuveen Floating. However, First Trust High is 1.06 times less risky than Nuveen Floating. It trades about 0.15 of its potential returns per unit of risk. Nuveen Floating Rate is currently generating about 0.13 per unit of risk. If you would invest 1,186 in First Trust High on August 31, 2024 and sell it today you would earn a total of 36.00 from holding First Trust High or generate 3.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 26.77% |
| Values | Daily Returns |
First Trust High vs. Nuveen Floating Rate
Performance |
| Timeline |
| First Trust High |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Nuveen Floating Rate |
First Trust and Nuveen Floating Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Trust and Nuveen Floating
The main advantage of trading using opposite First Trust and Nuveen Floating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Trust position performs unexpectedly, Nuveen Floating 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 Floating will offset losses from the drop in Nuveen Floating's long position.| First Trust vs. Franklin Templeton Limited | First Trust vs. Blackrock Floating Rate | First Trust vs. Cohen Steers Limited | First Trust vs. Blackstone Gso Long |
| Nuveen Floating vs. MFS Investment Grade | Nuveen Floating vs. Eaton Vance Municipal | Nuveen Floating vs. DTF Tax Free | Nuveen Floating vs. HUMANA INC |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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