Correlation Between Nuveen Variable and Western Asset
Can any of the company-specific risk be diversified away by investing in both Nuveen Variable 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 Variable 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 Variable Rate and Western Asset Mortgage, you can compare the effects of market volatilities on Nuveen Variable 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 Variable with a short position of Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuveen Variable and Western Asset.
Diversification Opportunities for Nuveen Variable and Western Asset
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Nuveen and Western is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen Variable Rate and Western Asset Mortgage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset Mortgage and Nuveen Variable 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 Variable 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 Mortgage has no effect on the direction of Nuveen Variable i.e., Nuveen Variable and Western Asset go up and down completely randomly.
Pair Corralation between Nuveen Variable and Western Asset
Given the investment horizon of 90 days Nuveen Variable Rate is expected to generate 1.27 times more return on investment than Western Asset. However, Nuveen Variable is 1.27 times more volatile than Western Asset Mortgage. It trades about 0.09 of its potential returns per unit of risk. Western Asset Mortgage is currently generating about 0.0 per unit of risk. If you would invest 1,876 in Nuveen Variable Rate on August 24, 2024 and sell it today you would earn a total of 26.00 from holding Nuveen Variable Rate or generate 1.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nuveen Variable Rate vs. Western Asset Mortgage
Performance |
| Timeline |
| Nuveen Variable Rate |
| Western Asset Mortgage |
Nuveen Variable and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nuveen Variable and Western Asset
The main advantage of trading using opposite Nuveen Variable and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuveen Variable 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 Variable vs. The Gabelli Equity | Nuveen Variable vs. Virtus AllianzGI Convertible | Nuveen Variable vs. The Gabelli Equity | Nuveen Variable vs. Oxford Lane Capital |
| Western Asset vs. Western Asset High | Western Asset vs. Pioneer Municipal High | Western Asset vs. Doubleline Income Solutions | Western Asset vs. Doubleline Yield Opportunities |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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