Correlation Between 3M and Nuveen Floating
Can any of the company-specific risk be diversified away by investing in both 3M 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 3M and Nuveen Floating into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 3M Company and Nuveen Floating Rate, you can compare the effects of market volatilities on 3M 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 3M with a short position of Nuveen Floating. Check out your portfolio center. Please also check ongoing floating volatility patterns of 3M and Nuveen Floating.
Diversification Opportunities for 3M and Nuveen Floating
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between 3M and Nuveen is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding 3M Company 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 3M 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 3M Company 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 3M i.e., 3M and Nuveen Floating go up and down completely randomly.
Pair Corralation between 3M and Nuveen Floating
Considering the 90-day investment horizon 3M Company is expected to generate 2.23 times more return on investment than Nuveen Floating. However, 3M is 2.23 times more volatile than Nuveen Floating Rate. It trades about 0.04 of its potential returns per unit of risk. Nuveen Floating Rate is currently generating about 0.03 per unit of risk. If you would invest 9,666 in 3M Company on September 2, 2024 and sell it today you would earn a total of 3,687 from holding 3M Company or generate 38.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 31.05% |
| Values | Daily Returns |
3M Company vs. Nuveen Floating Rate
Performance |
| Timeline |
| 3M Company |
| Nuveen Floating Rate |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
3M and Nuveen Floating Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 3M and Nuveen Floating
The main advantage of trading using opposite 3M and Nuveen Floating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 3M 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.| 3M vs. MDU Resources Group | 3M vs. Valmont Industries | 3M vs. Griffon | 3M vs. Compass Diversified Holdings |
| Nuveen Floating vs. Nuveen Floating Rate | Nuveen Floating vs. Blackrock Muni Intermediate | Nuveen Floating vs. Eaton Vance Senior | Nuveen Floating vs. Blackrock Floating Rate |
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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