Correlation Between Nuveen Preferred and Nuveen Oregon
Can any of the company-specific risk be diversified away by investing in both Nuveen Preferred and Nuveen Oregon 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 Oregon 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 Oregon Intermediate, you can compare the effects of market volatilities on Nuveen Preferred and Nuveen Oregon 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 Oregon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuveen Preferred and Nuveen Oregon.
Diversification Opportunities for Nuveen Preferred and Nuveen Oregon
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Nuveen and Nuveen is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen Preferred Securities and Nuveen Oregon Intermediate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Oregon Interm 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 Oregon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Oregon Interm has no effect on the direction of Nuveen Preferred i.e., Nuveen Preferred and Nuveen Oregon go up and down completely randomly.
Pair Corralation between Nuveen Preferred and Nuveen Oregon
Assuming the 90 days horizon Nuveen Preferred Securities is expected to generate 2.22 times more return on investment than Nuveen Oregon. However, Nuveen Preferred is 2.22 times more volatile than Nuveen Oregon Intermediate. It trades about 0.05 of its potential returns per unit of risk. Nuveen Oregon Intermediate is currently generating about 0.05 per unit of risk. If you would invest 1,411 in Nuveen Preferred Securities on November 2, 2024 and sell it today you would earn a total of 148.00 from holding Nuveen Preferred Securities or generate 10.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Nuveen Preferred Securities vs. Nuveen Oregon Intermediate
Performance |
| Timeline |
| Nuveen Preferred Sec |
| Nuveen Oregon Interm |
Nuveen Preferred and Nuveen Oregon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nuveen Preferred and Nuveen Oregon
The main advantage of trading using opposite Nuveen Preferred and Nuveen Oregon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuveen Preferred position performs unexpectedly, Nuveen Oregon 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 Oregon will offset losses from the drop in Nuveen Oregon's long position.| Nuveen Preferred vs. Technology Ultrasector Profund | Nuveen Preferred vs. Pgim Jennison Technology | Nuveen Preferred vs. Specialized Technology Fund | Nuveen Preferred vs. Columbia Global Technology |
| Nuveen Oregon vs. Ab Government Exchange | Nuveen Oregon vs. Franklin Government Money | Nuveen Oregon vs. Prudential Financial Services | Nuveen Oregon vs. Financial Industries Fund |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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