Correlation Between Nuveen Floating and BNY Mellon
Can any of the company-specific risk be diversified away by investing in both Nuveen Floating and BNY Mellon 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 Floating and BNY Mellon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nuveen Floating Rate and BNY Mellon High, you can compare the effects of market volatilities on Nuveen Floating and BNY Mellon 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 Floating with a short position of BNY Mellon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuveen Floating and BNY Mellon.
Diversification Opportunities for Nuveen Floating and BNY Mellon
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Nuveen and BNY is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen Floating Rate and BNY Mellon High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BNY Mellon High and Nuveen 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 Nuveen Floating Rate are associated (or correlated) with BNY Mellon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BNY Mellon High has no effect on the direction of Nuveen Floating i.e., Nuveen Floating and BNY Mellon go up and down completely randomly.
Pair Corralation between Nuveen Floating and BNY Mellon
Considering the 90-day investment horizon Nuveen Floating Rate is expected to under-perform the BNY Mellon. In addition to that, Nuveen Floating is 1.43 times more volatile than BNY Mellon High. It trades about -0.08 of its total potential returns per unit of risk. BNY Mellon High is currently generating about 0.28 per unit of volatility. If you would invest 254.00 in BNY Mellon High on October 21, 2024 and sell it today you would earn a total of 8.00 from holding BNY Mellon High or generate 3.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nuveen Floating Rate vs. BNY Mellon High
Performance |
| Timeline |
| Nuveen Floating Rate |
| BNY Mellon High |
Nuveen Floating and BNY Mellon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nuveen Floating and BNY Mellon
The main advantage of trading using opposite Nuveen Floating and BNY Mellon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuveen Floating position performs unexpectedly, BNY Mellon 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 BNY Mellon will offset losses from the drop in BNY Mellon's long position.| Nuveen Floating vs. Pioneer Floating Rate | Nuveen Floating vs. BlackRock Floating Rate | Nuveen Floating vs. Blackrock Muni Intermediate | Nuveen Floating vs. Eaton Vance Senior |
| BNY Mellon vs. Credit Suisse Asset | BNY Mellon vs. Mfs Intermediate High | BNY Mellon vs. Eaton Vance Risk | BNY Mellon vs. Nuveen Floating Rate |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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