Correlation Between Nuveen Preferred and Western Asset
Can any of the company-specific risk be diversified away by investing in both Nuveen Preferred 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 Preferred 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 Preferred and and Western Asset Investment, you can compare the effects of market volatilities on Nuveen Preferred 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 Preferred with a short position of Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuveen Preferred and Western Asset.
Diversification Opportunities for Nuveen Preferred and Western Asset
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Nuveen and Western is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen Preferred and and Western Asset Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset Investment 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 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 Investment has no effect on the direction of Nuveen Preferred i.e., Nuveen Preferred and Western Asset go up and down completely randomly.
Pair Corralation between Nuveen Preferred and Western Asset
Considering the 90-day investment horizon Nuveen Preferred and is expected to generate 0.9 times more return on investment than Western Asset. However, Nuveen Preferred and is 1.11 times less risky than Western Asset. It trades about 0.06 of its potential returns per unit of risk. Western Asset Investment is currently generating about 0.03 per unit of risk. If you would invest 1,651 in Nuveen Preferred and on August 28, 2024 and sell it today you would earn a total of 400.00 from holding Nuveen Preferred and or generate 24.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nuveen Preferred and vs. Western Asset Investment
Performance |
| Timeline |
| Nuveen Preferred |
| Western Asset Investment |
Nuveen Preferred and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nuveen Preferred and Western Asset
The main advantage of trading using opposite Nuveen Preferred and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuveen Preferred 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.The idea behind Nuveen Preferred and and Western Asset Investment 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.| Western Asset vs. Pioneer Floating Rate | Western Asset vs. The Gabelli Equity | Western Asset vs. Pioneer Municipal High | Western Asset vs. Nuveen Global High |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
Other Complementary Tools
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |