Correlation Between Nuveen Floating and Western Asset
Can any of the company-specific risk be diversified away by investing in both Nuveen Floating 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 Floating 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 Floating Rate and Western Asset Global, you can compare the effects of market volatilities on Nuveen Floating 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 Floating with a short position of Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuveen Floating and Western Asset.
Diversification Opportunities for Nuveen Floating and Western Asset
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Nuveen and Western is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen Floating Rate and Western Asset Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset Global 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 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 Global has no effect on the direction of Nuveen Floating i.e., Nuveen Floating and Western Asset go up and down completely randomly.
Pair Corralation between Nuveen Floating and Western Asset
Considering the 90-day investment horizon Nuveen Floating Rate is expected to under-perform the Western Asset. But the fund apears to be less risky and, when comparing its historical volatility, Nuveen Floating Rate is 1.09 times less risky than Western Asset. The fund trades about -0.03 of its potential returns per unit of risk. The Western Asset Global is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 586.00 in Western Asset Global on November 2, 2024 and sell it today you would earn a total of 94.00 from holding Western Asset Global or generate 16.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 22.67% |
| Values | Daily Returns |
Nuveen Floating Rate vs. Western Asset Global
Performance |
| Timeline |
| Nuveen Floating Rate |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Western Asset Global |
Nuveen Floating and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nuveen Floating and Western Asset
The main advantage of trading using opposite Nuveen Floating and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuveen Floating 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.| Nuveen Floating vs. Nuveen Floating Rate | Nuveen Floating vs. Blackrock Muni Intermediate | Nuveen Floating vs. Eaton Vance Senior | Nuveen Floating vs. Blackrock Floating Rate |
| Western Asset vs. Western Asset High | Western Asset vs. BNY Mellon High | Western Asset vs. Allspring Income Opportunities | Western Asset vs. Allianzgi Convertible Income |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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