Correlation Between Nuveen Global and FAM
Can any of the company-specific risk be diversified away by investing in both Nuveen Global and FAM 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 Global and FAM into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nuveen Global High and FAM, you can compare the effects of market volatilities on Nuveen Global and FAM 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 Global with a short position of FAM. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuveen Global and FAM.
Diversification Opportunities for Nuveen Global and FAM
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Nuveen and FAM is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen Global High and FAM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FAM and Nuveen Global 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 Global High are associated (or correlated) with FAM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FAM has no effect on the direction of Nuveen Global i.e., Nuveen Global and FAM go up and down completely randomly.
Pair Corralation between Nuveen Global and FAM
Considering the 90-day investment horizon Nuveen Global is expected to generate 1.16 times less return on investment than FAM. In addition to that, Nuveen Global is 1.01 times more volatile than FAM. It trades about 0.08 of its total potential returns per unit of risk. FAM is currently generating about 0.09 per unit of volatility. If you would invest 487.00 in FAM on August 29, 2024 and sell it today you would earn a total of 187.00 from holding FAM or generate 38.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 90.91% |
| Values | Daily Returns |
Nuveen Global High vs. FAM
Performance |
| Timeline |
| Nuveen Global High |
| FAM |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
Nuveen Global and FAM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nuveen Global and FAM
The main advantage of trading using opposite Nuveen Global and FAM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuveen Global position performs unexpectedly, FAM 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 FAM will offset losses from the drop in FAM's long position.| Nuveen Global vs. Advent Claymore Convertible | Nuveen Global vs. Blackstone Gso Strategic | Nuveen Global vs. Western Asset Investment | Nuveen Global vs. Pioneer Floating Rate |
| FAM vs. Blackstone Gso Long | FAM vs. Blackstone Gso Senior | FAM vs. Nuveen Floating Rate | FAM vs. Pioneer 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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