Correlation Between Nuveen Credit and Nuveen Floating
Can any of the company-specific risk be diversified away by investing in both Nuveen Credit and Nuveen Floating 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 Credit and Nuveen Floating into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nuveen Credit Strategies and Nuveen Floating Rate, you can compare the effects of market volatilities on Nuveen Credit and Nuveen Floating 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 Credit with a short position of Nuveen Floating. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuveen Credit and Nuveen Floating.
Diversification Opportunities for Nuveen Credit and Nuveen Floating
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Nuveen and Nuveen is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen Credit Strategies and Nuveen Floating Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Floating Rate and Nuveen Credit 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 Credit Strategies are associated (or correlated) with Nuveen Floating. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Floating Rate has no effect on the direction of Nuveen Credit i.e., Nuveen Credit and Nuveen Floating go up and down completely randomly.
Pair Corralation between Nuveen Credit and Nuveen Floating
Considering the 90-day investment horizon Nuveen Credit Strategies is expected to generate 1.01 times more return on investment than Nuveen Floating. However, Nuveen Credit is 1.01 times more volatile than Nuveen Floating Rate. It trades about 0.1 of its potential returns per unit of risk. Nuveen Floating Rate is currently generating about 0.09 per unit of risk. If you would invest 414.00 in Nuveen Credit Strategies on August 28, 2024 and sell it today you would earn a total of 165.00 from holding Nuveen Credit Strategies or generate 39.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nuveen Credit Strategies vs. Nuveen Floating Rate
Performance |
| Timeline |
| Nuveen Credit Strategies |
| Nuveen Floating Rate |
Nuveen Credit and Nuveen Floating Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nuveen Credit and Nuveen Floating
The main advantage of trading using opposite Nuveen Credit and Nuveen Floating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuveen Credit position performs unexpectedly, Nuveen Floating 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 Nuveen Floating will offset losses from the drop in Nuveen Floating's long position.| Nuveen Credit vs. Eaton Vance Floating | Nuveen Credit vs. NXG NextGen Infrastructure | Nuveen Credit vs. GAMCO Natural Resources | Nuveen Credit vs. MFS Investment Grade |
| Nuveen Floating vs. Eaton Vance Floating | Nuveen Floating vs. NXG NextGen Infrastructure | Nuveen Floating vs. GAMCO Natural Resources | Nuveen Floating vs. MFS Investment Grade |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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