Correlation Between Nuveen Preferred and Nuveen Short-duration
Can any of the company-specific risk be diversified away by investing in both Nuveen Preferred and Nuveen Short-duration 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 Preferred and Nuveen Short-duration into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nuveen Preferred Securities and Nuveen Short Duration High, you can compare the effects of market volatilities on Nuveen Preferred and Nuveen Short-duration 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 Preferred with a short position of Nuveen Short-duration. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuveen Preferred and Nuveen Short-duration.
Diversification Opportunities for Nuveen Preferred and Nuveen Short-duration
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Nuveen and Nuveen is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen Preferred Securities and Nuveen Short Duration High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Short Duration and Nuveen Preferred 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 Preferred Securities are associated (or correlated) with Nuveen Short-duration. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Short Duration has no effect on the direction of Nuveen Preferred i.e., Nuveen Preferred and Nuveen Short-duration go up and down completely randomly.
Pair Corralation between Nuveen Preferred and Nuveen Short-duration
Assuming the 90 days horizon Nuveen Preferred Securities is expected to generate 1.02 times more return on investment than Nuveen Short-duration. However, Nuveen Preferred is 1.02 times more volatile than Nuveen Short Duration High. It trades about 0.24 of its potential returns per unit of risk. Nuveen Short Duration High is currently generating about 0.16 per unit of risk. If you would invest 1,391 in Nuveen Preferred Securities on August 29, 2024 and sell it today you would earn a total of 170.00 from holding Nuveen Preferred Securities or generate 12.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nuveen Preferred Securities vs. Nuveen Short Duration High
Performance |
| Timeline |
| Nuveen Preferred Sec |
| Nuveen Short Duration |
Nuveen Preferred and Nuveen Short-duration Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nuveen Preferred and Nuveen Short-duration
The main advantage of trading using opposite Nuveen Preferred and Nuveen Short-duration positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuveen Preferred position performs unexpectedly, Nuveen Short-duration 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 Short-duration will offset losses from the drop in Nuveen Short-duration's long position.| Nuveen Preferred vs. T Rowe Price | Nuveen Preferred vs. Barings Active Short | Nuveen Preferred vs. Multisector Bond Sma | Nuveen Preferred vs. Mirova Global Green |
| Nuveen Short-duration vs. Blrc Sgy Mnp | Nuveen Short-duration vs. Victory High Yield | Nuveen Short-duration vs. Rationalpier 88 Convertible | Nuveen Short-duration vs. Ambrus Core Bond |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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