Correlation Between Nuveen New and Western Asset
Can any of the company-specific risk be diversified away by investing in both Nuveen New 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 New 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 New York and Western Asset Managed, you can compare the effects of market volatilities on Nuveen New 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 New with a short position of Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuveen New and Western Asset.
Diversification Opportunities for Nuveen New and Western Asset
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Nuveen and Western is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen New York and Western Asset Managed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset Managed and Nuveen New 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 New York 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 Managed has no effect on the direction of Nuveen New i.e., Nuveen New and Western Asset go up and down completely randomly.
Pair Corralation between Nuveen New and Western Asset
Considering the 90-day investment horizon Nuveen New is expected to generate 1.78 times less return on investment than Western Asset. But when comparing it to its historical volatility, Nuveen New York is 1.03 times less risky than Western Asset. It trades about 0.14 of its potential returns per unit of risk. Western Asset Managed is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 1,027 in Western Asset Managed on August 29, 2024 and sell it today you would earn a total of 36.00 from holding Western Asset Managed or generate 3.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nuveen New York vs. Western Asset Managed
Performance |
| Timeline |
| Nuveen New York |
| Western Asset Managed |
Nuveen New and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nuveen New and Western Asset
The main advantage of trading using opposite Nuveen New and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuveen New 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 New vs. MFS Investment Grade | Nuveen New vs. Invesco High Income | Nuveen New vs. Eaton Vance National | Nuveen New vs. Federated Premier Municipal |
| Western Asset vs. Gabelli Global Small | Western Asset vs. MFS Investment Grade | Western Asset vs. Eaton Vance National | Western Asset vs. GAMCO Natural Resources |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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