Correlation Between Nuveen Preferred and Tekla Life
Can any of the company-specific risk be diversified away by investing in both Nuveen Preferred and Tekla Life 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 Preferred and Tekla Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nuveen Preferred and and Tekla Life Sciences, you can compare the effects of market volatilities on Nuveen Preferred and Tekla Life 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 Preferred with a short position of Tekla Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuveen Preferred and Tekla Life.
Diversification Opportunities for Nuveen Preferred and Tekla Life
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Nuveen and Tekla is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen Preferred and and Tekla Life Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tekla Life Sciences and Nuveen Preferred 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 Preferred and are associated (or correlated) with Tekla Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tekla Life Sciences has no effect on the direction of Nuveen Preferred i.e., Nuveen Preferred and Tekla Life go up and down completely randomly.
Pair Corralation between Nuveen Preferred and Tekla Life
Considering the 90-day investment horizon Nuveen Preferred and is expected to generate 0.52 times more return on investment than Tekla Life. However, Nuveen Preferred and is 1.93 times less risky than Tekla Life. It trades about 0.14 of its potential returns per unit of risk. Tekla Life Sciences is currently generating about 0.07 per unit of risk. If you would invest 1,762 in Nuveen Preferred and on August 28, 2024 and sell it today you would earn a total of 289.00 from holding Nuveen Preferred and or generate 16.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nuveen Preferred and vs. Tekla Life Sciences
Performance |
| Timeline |
| Nuveen Preferred |
| Tekla Life Sciences |
Nuveen Preferred and Tekla Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nuveen Preferred and Tekla Life
The main advantage of trading using opposite Nuveen Preferred and Tekla Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuveen Preferred position performs unexpectedly, Tekla Life 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 Tekla Life will offset losses from the drop in Tekla Life's long position.The idea behind Nuveen Preferred and and Tekla Life Sciences pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Tekla Life vs. Tekla World Healthcare | Tekla Life vs. Tekla Healthcare Opportunities | Tekla Life vs. Royce Value Closed | Tekla Life vs. John Hancock Financial |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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