Correlation Between Highland Floating and Nuveen New
Can any of the company-specific risk be diversified away by investing in both Highland Floating and Nuveen New 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 Highland Floating and Nuveen New into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Highland Floating Rate and Nuveen New Jersey, you can compare the effects of market volatilities on Highland Floating and Nuveen New 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 Highland Floating with a short position of Nuveen New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Highland Floating and Nuveen New.
Diversification Opportunities for Highland Floating and Nuveen New
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Highland and Nuveen is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Highland Floating Rate and Nuveen New Jersey in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen New Jersey and Highland Floating 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 Highland Floating Rate are associated (or correlated) with Nuveen New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen New Jersey has no effect on the direction of Highland Floating i.e., Highland Floating and Nuveen New go up and down completely randomly.
Pair Corralation between Highland Floating and Nuveen New
Given the investment horizon of 90 days Highland Floating Rate is expected to generate 4.44 times more return on investment than Nuveen New. However, Highland Floating is 4.44 times more volatile than Nuveen New Jersey. It trades about 0.11 of its potential returns per unit of risk. Nuveen New Jersey is currently generating about 0.18 per unit of risk. If you would invest 561.00 in Highland Floating Rate on August 30, 2024 and sell it today you would earn a total of 27.00 from holding Highland Floating Rate or generate 4.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Highland Floating Rate vs. Nuveen New Jersey
Performance |
| Timeline |
| Highland Floating Rate |
| Nuveen New Jersey |
Highland Floating and Nuveen New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Highland Floating and Nuveen New
The main advantage of trading using opposite Highland Floating and Nuveen New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Highland Floating position performs unexpectedly, Nuveen New 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 New will offset losses from the drop in Nuveen New's long position.| Highland Floating vs. Gabelli Global Small | Highland Floating vs. MFS Investment Grade | Highland Floating vs. Eaton Vance National | Highland Floating vs. GAMCO Natural Resources |
| Nuveen New vs. Gabelli Global Small | Nuveen New vs. MFS Investment Grade | Nuveen New vs. Eaton Vance National | Nuveen New vs. GAMCO Natural Resources |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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