Correlation Between Icon Bond and Nuveen Strategic
Can any of the company-specific risk be diversified away by investing in both Icon Bond and Nuveen Strategic 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 Icon Bond and Nuveen Strategic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Icon Bond Fund and Nuveen Strategic Income, you can compare the effects of market volatilities on Icon Bond and Nuveen Strategic 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 Icon Bond with a short position of Nuveen Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Icon Bond and Nuveen Strategic.
Diversification Opportunities for Icon Bond and Nuveen Strategic
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Icon and Nuveen is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Icon Bond Fund and Nuveen Strategic Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Strategic Income and Icon Bond 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 Icon Bond Fund are associated (or correlated) with Nuveen Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Strategic Income has no effect on the direction of Icon Bond i.e., Icon Bond and Nuveen Strategic go up and down completely randomly.
Pair Corralation between Icon Bond and Nuveen Strategic
Assuming the 90 days horizon Icon Bond is expected to generate 1.21 times less return on investment than Nuveen Strategic. But when comparing it to its historical volatility, Icon Bond Fund is 1.89 times less risky than Nuveen Strategic. It trades about 0.26 of its potential returns per unit of risk. Nuveen Strategic Income is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 949.00 in Nuveen Strategic Income on September 1, 2024 and sell it today you would earn a total of 48.00 from holding Nuveen Strategic Income or generate 5.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Icon Bond Fund vs. Nuveen Strategic Income
Performance |
| Timeline |
| Icon Bond Fund |
| Nuveen Strategic Income |
Icon Bond and Nuveen Strategic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Icon Bond and Nuveen Strategic
The main advantage of trading using opposite Icon Bond and Nuveen Strategic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Icon Bond position performs unexpectedly, Nuveen Strategic 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 Strategic will offset losses from the drop in Nuveen Strategic's long position.| Icon Bond vs. Icon Bond Fund | Icon Bond vs. Icon Equity Income | Icon Bond vs. Icon Longshort Fund | Icon Bond vs. Icon Longshort Fund |
| Nuveen Strategic vs. Nuveen Small Cap | Nuveen Strategic vs. Nuveen Real Estate | Nuveen Strategic vs. Nuveen Real Estate | Nuveen Strategic vs. Nuveen Preferred Securities |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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