Correlation Between Nuveen Core and Western Asset
Can any of the company-specific risk be diversified away by investing in both Nuveen Core and Western Asset 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 Core and Western Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nuveen Core Equity and Western Asset Global, you can compare the effects of market volatilities on Nuveen Core and Western Asset 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 Core with a short position of Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuveen Core and Western Asset.
Diversification Opportunities for Nuveen Core and Western Asset
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Nuveen and Western is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen Core Equity and Western Asset Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset Global and Nuveen Core 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 Core Equity are associated (or correlated) with Western Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Asset Global has no effect on the direction of Nuveen Core i.e., Nuveen Core and Western Asset go up and down completely randomly.
Pair Corralation between Nuveen Core and Western Asset
Considering the 90-day investment horizon Nuveen Core is expected to generate 1.86 times less return on investment than Western Asset. In addition to that, Nuveen Core is 1.19 times more volatile than Western Asset Global. It trades about 0.09 of its total potential returns per unit of risk. Western Asset Global is currently generating about 0.2 per unit of volatility. If you would invest 663.00 in Western Asset Global on October 23, 2024 and sell it today you would earn a total of 19.00 from holding Western Asset Global or generate 2.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nuveen Core Equity vs. Western Asset Global
Performance |
| Timeline |
| Nuveen Core Equity |
| Western Asset Global |
Nuveen Core and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nuveen Core and Western Asset
The main advantage of trading using opposite Nuveen Core and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuveen Core position performs unexpectedly, Western Asset 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 Western Asset will offset losses from the drop in Western Asset's long position.| Nuveen Core vs. Brandywineglobal Globalome Opportunities | Nuveen Core vs. Western Asset Global | Nuveen Core vs. Pioneer Floating Rate | Nuveen Core vs. Nuveen Real Asset |
| Western Asset vs. Western Asset High | Western Asset vs. BNY Mellon High | Western Asset vs. Allspring Income Opportunities | Western Asset vs. Allianzgi Convertible Income |
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 Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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