Correlation Between Jpmorgan High and Nuveen Preferred
Can any of the company-specific risk be diversified away by investing in both Jpmorgan High and Nuveen Preferred 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 Jpmorgan High and Nuveen Preferred into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jpmorgan High Yield and Nuveen Preferred Securities, you can compare the effects of market volatilities on Jpmorgan High and Nuveen Preferred 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 Jpmorgan High with a short position of Nuveen Preferred. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jpmorgan High and Nuveen Preferred.
Diversification Opportunities for Jpmorgan High and Nuveen Preferred
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Jpmorgan and Nuveen is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Jpmorgan High Yield and Nuveen Preferred Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Preferred Sec and Jpmorgan High 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 Jpmorgan High Yield are associated (or correlated) with Nuveen Preferred. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Preferred Sec has no effect on the direction of Jpmorgan High i.e., Jpmorgan High and Nuveen Preferred go up and down completely randomly.
Pair Corralation between Jpmorgan High and Nuveen Preferred
Assuming the 90 days horizon Jpmorgan High is expected to generate 1.42 times less return on investment than Nuveen Preferred. But when comparing it to its historical volatility, Jpmorgan High Yield is 1.36 times less risky than Nuveen Preferred. It trades about 0.24 of its potential returns per unit of risk. Nuveen Preferred Securities is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 1,537 in Nuveen Preferred Securities on October 25, 2024 and sell it today you would earn a total of 19.00 from holding Nuveen Preferred Securities or generate 1.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 94.74% |
| Values | Daily Returns |
Jpmorgan High Yield vs. Nuveen Preferred Securities
Performance |
| Timeline |
| Jpmorgan High Yield |
| Nuveen Preferred Sec |
Jpmorgan High and Nuveen Preferred Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jpmorgan High and Nuveen Preferred
The main advantage of trading using opposite Jpmorgan High and Nuveen Preferred positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jpmorgan High position performs unexpectedly, Nuveen Preferred 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 Preferred will offset losses from the drop in Nuveen Preferred's long position.| Jpmorgan High vs. William Blair Small | Jpmorgan High vs. Small Cap Value | Jpmorgan High vs. Mid Cap Growth Profund | Jpmorgan High vs. Ab Small Cap |
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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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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